Kenya Revenue Authority has finally acted and from this month taxed ministers and assistant ministers. The taxman is complying with an order by the Head of the Civil Service Francis Muthaura who authorised the move on all the 70-plus ministers and their assistants.
The Star yesterday learnt that some ministers and assistant ministers will this month receive a fraction of their salary or nothing at all as most of them have committed a huge chunk on investments and other expenses. Majority of them depend on their allowances for their day-to-day living expenses.
Several ministers and assistant ministers who spoke to the Star yesterday said they were shocked when they received their payslips with heavy deductions on their salaries.
Muthaura's orders to permanent secretaries to comply with the new tax regime came after President Kibaki and Prime Minister Raila Odinga paid their taxes.
Majority of the ministers and their assistants as well as MPs have been reluctant to pay their taxes claiming taxation should only come into effect after they complete their parliamentary term. The taxman issued Kibaki, Raila and Vice President Kalonzo Musyoka with their tax compliant certificates after they paid outstanding taxes.
Assistant minister Magerer Langat confirmed the deductions on his payslip and said he and his colleagues had not been informed about it in advance.
Thirty per cent has been deducted from ministers who got an average of Sh500,000 to Sh600,000 a month and assistant ministers who earn Sh400,000 to Sh450,000 in salaries and allowances.
According to a payslip of one of the assistant ministers, the amount deducted as Pay as You Earn was Sh124,000 out of the Sh435,000 reflected as his gross salary. Also taxed were allowances such as rental, ministerial responsibility and domestic servant allowances.
Prior to this month, ministers and their assistants paid tax on their basic salaries and nothing for their allowances which are sometimes double or triple their basic salary. "Its ridiculous that this has been done at a time when Parliament is negotiating with KRA regarding this matter,” said assistant minister Kareke Mbiuki adding that the action was taken "in bad faith" since it denied ministers and assistant ministers the chance of benefitting from the ongoing negotiations.
Parliamentary Service Commission chaired by Speaker Kenneth Marende is involved in negotiating how to settle the tax dispute. Last week, Marende said details of the negotiations would be made public once an agreement was reached on the matter.
MPs are hoping to persuade Finance minister Uhuru Kenyatta to sign and table two crucial Bills based on the recommendations of the Akiwumi Tribunal which recommended that MPs be given a pay rise which would cushion them against taxation. Akiwumi proposed that MPs be paid a minimum monthly basic salary of Sh1.1million.
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