What you need to know:
- MPs, among the first to feel the heat of the new Constitution which requires them to pay tax, plan a last-ditch attempt for higher pay to cushion themselves when House reopens
Only 14 days separate Kenyans from the promise of the new Constitution passed this week following its gazettement on Friday.
Among the immediate benefits of the new law spring from the bill of rights which provides for equal rights for married couples — including property rights — and outlaws remanding suspects for minor offences that attract sentences of six months and under.
New laws that provide for dual citizenship, gender balance in the leadership of the corporation boards and the right to emergency treatment at any hospital will also come into effect on or about August 20 when the President officially promulgates the Constitution or, in default, the document automatically comes into force.
Among the first section of the population to feel the heat are Members of parliament, who will have to start paying tax on their salaries and allowances for the first time.
The new constitution provides that no law may exempt any state officer from taxation.
Nominated MP Millie Odhiambo said that the new law will also create job opportunities for women as an opportunity for national growth.
“Women are the nurturers and caregivers of this nation, and most of them are out of jobs, finding it difficult to care for their families. Ensuring a balance at the work place will offer them the financial freedom they need to fulfil their responsibilities,” she said.
Former Law Society of Kenya chairman Okong’o O’Mogeni told Saturday Nation that immediately the new constitution is promulgated, Kenyans will among other things have the right of access to information as provided for in Article 35.
According to family lawyer Judy Thongori, spouses too will start enjoying equality in a marriage.
FIDA-Kenya’s Executive Director, Grace Maingi argued that for a long time, Kenya has been used as a poor example of a democracy that favours its men.
“Hopefully, we will soon start holding our heads high when we visit other nations. Countries such as Rwanda, Uganda and Tanzania boast significant women representation in influential bodies such as Parliament,” she said.
Beginning August 20, the taxman will have MPs and the Attorney General Amos Wako as his clients.
The new Constitution at clause 210 reads: ‘No law may exclude or authorise the exclusion of a State officer from payment of tax by reason of, the office held by that State officer; or the nature of the work of the State officer.”
Thus, the 222 MPs will have to pay tax on the allowance while Mr Wako will pay tax both on his salary and allowances.
Judges and commissioners of the Public Service Commission, together with the Controller and Auditor General will also pay tax on their salaries. Previously only their allowances were taxable. The MPs did not pay tax on their allowances but they paid Sh53,000 tax on their basic pay of Sh200,000.
With the new clients, the Kenya Revenue Authority will net an estimated Sh700 million per year.
The money is enough to build 1,750 ordinary classrooms or to build and equip up to 20 high-end primary schools.
MPs plus the AG (as an ex-officio MP) had the clout of section 5 of the National Assembly Remuneration Act shielding them from paying tax, while the judges, PSC commissioners, the Controller and Auditor General and again the AG are protected by section 104 of the current constitution from paying tax on their salaries, but their allowances are taxed.
Mr Okong’o Omogeni, a senior lawyer and a former chairman of the Law Society of Kenya, said the taxation will begin in September.
“There is no discretion of the president to suspend that provision,” said Mr Omogeni.
This means that the July deal between MPs and the President that they (MPs) begin paying tax in the next Parliament is just that — a gentleman’s agreement that has no basis in law.
The bargain came when MPs threatened to shoot down the Finance Bill (to fund the Budget) and Appropriations Bill (to allow the government to access the approved money) if their monthly pay was not raised to Sh1.1 million.
The MPs return to Parliament next week to work on the approved estimates before the August 31 legal deadline by which they ought to have approved the Appropriations Bill.
Mr Omogeni said all the cases pending in court questioning the exemption of MPs from paying tax on their hefty perks were now superfluous. The Vice chairman of the Parliamentary Service Commission, Mr Walter Nyambati (Kitutu Masaba) turned on Kenyans to “support” the MPs in their quest to raise their pay.
“MPs had agreed that they will pay tax like all other Kenyans, the only thing they want to ensure is that they are not taking home less that what they are currently earning,” said Mr Nyambati.
“Whether there is taxation or not, the members should not worry but live up to their major task to enact legislations to implement this new constitution.
PSC will give them support for them to be able to effectively carry out their mandate.”
But the Federation of Kenya Employers thinks the argument that they should first raise their pay before paying tax or that they postpone the paying of tax to 2012 is not viable.
“The law says they have to pay tax. To me that argument does not hold water. If it is the law, it applies to everybody. If you have leaders who make laws that do not apply to them, then that’s is an insult to the electorate. It is just unethical,” said Ms Jacqueline Mugo, the FKE boss.
On the push for a pay rise, Ms Mugo said it amounted to absconding the duty of every Kenyan to pay tax.
“For them to get that top up (to Sh1.1 million) they are essentially telling us to pay their tax. They should not get it. We are their employers,” she said.
Parliament gave the President and Finance Minister Uhuru Kenyatta “more time” to consider the pay increase. The future of that agreement will be decided depending on how the taxman, whose name was invoked when the deal to postpone taxation to 2012 was being struck in July, interprets the law.
However, Justice Minister Mutula Kilonzo is of the view that the transitional clauses do not touch the powers of the PSC, which sets salaries in the first place.
“Provision regarding Parliament at section 45 B of the existing constitution was extended. If they (MPs) want to review their salaries they are empowered to appoint commission to look at their benefits,” said the Justice Minister. “There is no reason for Parliament to panic.”
An aide to the Finance Minister answered calls placed to the minister’s known cellphone number and promised to get back. But he hadn’t done so by the time we went to press.
The verdict now lies with the High Court which is granted the powers to interpret the Constitution and iron out any discrepancies.