Hope of Taming MPs' Greed Lies in New Constitution

You might think they would have learnt their lesson by now. But not even public outcry has stopped Kenya's MPs from increasing their own salaries over the past five years and refusing to pay tax on their hefty pay.

On Wednesday, the legislators awarded themselves a pay-rise by unanimously adopting recommendations of the Parliamentary Service Commission (PSC).

They now want to be paid a monthly salary of Sh1.1 million, from the current Sh851,000, a development that is likely to irk Kenyans.

In addition, they have passed a provision that could see their pay automatically go up by at least five per cent annually to cushion them from the ravages of inflation.

The PSC wants Finance minister Uhuru Kenyatta to publish four Bills and table them before Parliament, to give legal teeth to the Tribunal's report and the Commission's recommendations within the next seven days from Wednesday.

The Bills include the National Assembly Remuneration (Amendment) Bill, 2010, the Parliament Pension (Amendment) Bill, 2010 and the Income Tax (Amendment) Bill, 2010.

The other is the Retirement Benefits (Prime Minister, Vice President and Speakers of the National Assembly Bill, 2010) to provide for pension benefits for the three officials.

But analysts said the MPs' joy, if the pay is approved, could me short lived should Kenyans vote for the proposed new Constitution on August 4.

The charter has taken away MPs' powers to increase their own salaries, bringing them under the tax net, a move which could hand Kenyans a crucial victory over an institution that has lately attracted public outrage for repeatedly dipping fingers into the public purse even during hard economic times.

If the draft is passed into law, a Salaries and Remuneration Commission will be created and mandated to set and regularly review the remuneration and benefits of all state officers, defined in the draft as "a person holding a state office," which includes constitutional and legal office holders such as the President and his deputy, cabinet ministers, MPs, the judiciary and others.

"The proposed Constitution has the potential of removing patronage politics in the use of public resources," said Dr David Ndii, an economist.

"It could also ensure every public officer gives Kenyans the value for money in all transactions and service provision," said Dr Ndii.

It is estimated that the MPs' salaries and perks will cost Kenyan tax payers upwards of Sh2.5 billion in the current financial year, a figure which excludes other numerous benefits such as tax free car grants, mortgage allowances and a generous health insurance cover.

Kenyan MPs are among the highest paid in Africa and have come under international criticism for leading flamboyant lifestyles at the expense of a majority of Kenyans who live on less than a dollar a day.

But the legislators still believe that what they are paid is not in tandem with the job they do.

"Human nature is that employers want to pay less to their employees; while the employees want more to justify the work done. We need to balance these two," said Parliamentary Service Commission vice chairman Walter Nyambati who tabled the report in the House.

"It will be unjust to reduce the remuneration of MPs half-way through their (five-year) contract."

Among the country's top earners under the new proposals is the Prime Minister who has been allocated Sh3.2 million a month in salary.

The Vice President will take home Sh2.79 million the Speaker Sh2.76 million, the Deputy Speaker Sh1.84 million, while the two deputy prime ministers will each earn Sh1.89 million.

Ironically, the Akiwumi tribunal was appointed following widespread public anger and protest over MPs' refusal to pay taxes even as they repeatedly raised their pay over the last five years.

"Bringing MPs into the tax net will ensure that the burden of raising Government revenues will be greatly reduced as the proposed Constitution if passed could entirely tighten public financial management, " said Martin Kisuu, a tax partner at regional consulting firm PKF

Leave allowance

The Akiwumi tribunal has however proposed a raise in the proportion of MPs' basic salary that is subject to taxation from Sh200,000 to Sh350,000; but still left the parliamentarians' pay slips the better by raising their non taxable allowances, which ordinarily form the bulk of their income.

And all former MPs earning a pension below Sh100,000 per month will have the amount raised to Sh100,000.

Should the proposals see the light of day, MPs will enjoy a gratuity of 20 per cent of the basic salary for every year worked, a shift from the current Sh1.5 million for the five year worked.

The disparities and regular pay rises for a select few are seen as a perpetuation of the class divide and has increased calls for the rationalisation of the remuneration for government employees.

In the new proposals, a Bill amending the National Assembly Renumeration Act will see taxpayers foot a maternity allowance of Sh180,000 for every female MP and a paternity leave allowance of Sh30,000 a year for every male MP.