MPs decide one term equals full pension

By Martin Mutua

Stalked by the fear of not making it back to Parliament, MPs are now proposing hefty perks to cushion colleagues who will be rejected by the electorate in next year’s elections, and former legislators.

Parliament’s Budget Committee wants former MPs it says are now living in poverty to earn the equivalent of 1,000 US dollars (Sh91,000) as monthly pension.

The news came as it emerged Parliament is also negotiating with Kenya Revenue Authority to end the deadlock over the latter’s decision to tax their salaries.

The recommendations by the Committee mirror those in the 2009 Akiwumi Tribunal that were already rejected by Finance Minister Uhuru Kenyatta.

In its report challenging Uhuru’s June 8 Budget estimates, the Committee, chaired by Maragwa MP Elias Mbau, is also seeking Parliament’s approval for MPs who have served only one term to earn a monthly pension.

An opinion poll carried out last month, indicated that most MPs in the current Parliament would not be voted back in the coming elections.

The proposal to pay a million dollars to destitute former MPs was made by the Akiwumi Tribunal, but now the Budget Committee feels it "should be operationalised."

If the Akiwumi report currently pending before the House is recommended, MPs salaries will increase from the current Sh851,000 to Sh1.1 million.

Tax-exempt

The report also recommends that Prime Minister Raila Odinga earns Sh2.9 million, Vice President Kalonzo Musyoka Sh2.19 million, and House Speaker Kenneth Marende Sh2.1 million.

If the recommendations are to be adopted, the two Deputy Prime Ministers, Uhuru and Musalia Mudavadi would each earn Sh1.6 million. The Deputy Speaker would be entitled to Sh1.4 million a month, if the new perks are implemented.

The report stated the allowances, including transport, responsibility, and entertainment should be taxable. The Akiwumi Tribunal recommended that the only tax-exempt allowances be those that facilitate an MP in the discharge of responsibility such as house, constituency and car maintenance.

The MPs would pay Sh227,861 in tax every month, which is essentially the top-up to their current consolidated monthly pay of Sh851, 000.

The increment to cater for the taxation element would leave each with some Sh12,000 every month to spare.

And sources told The Standard a deal that could see MPs either escape the taxation or get ample time to comply is in the offing following a special meeting between the Parliamentary Service Commission and KRA on Wednesday morning.

KRA Commissioner General Michael Waweru led a high powered team from his office in a two-hour closed door meeting with Speaker Marende and members of the PSC.

Yesterday, Marende confirmed to The Standard that the meeting did indeed take place, saying the two parties intended to reach an amicable solution to the matter in accordance with the law.

"This matter we intend to resolve in accordance with the provisions of the Constitution and all relevant applicable laws," added the Speaker.

In a telephone interview, Marende said they had reached the way forward, although not in the final form.

"We really held very healthy deliberations with the KRA Commissioner General and all his top officers involved in the matter, and am sure we are going to agree in accordance with the law," he added.

But the Speaker took issue with critics who had taken to personalising the matter towards his person, saying as the head of the Legislature, he was duty bound guide the institution in accordance with the law.

"I am the Speaker of the National Assembly and the head of the Legislature, and therefore you cannot separate me as Marende from the leadership of Parliament and turn the issue personal, because that is really not fair," he added.

The Speaker added that since he was elected to head the Legislature, his track record has been clear and speaks for itself, and he would not renege on matters of public interest.

At the same time the sources disclosed that KRA would meet again with the Speaker and his team next week to deliberate on the matter further, in a bid to reach a conclusion.

But a top KRA official who preferred anonymity said the meeting was confronted with scenarios of what would befall Parliament if the taxation on members went ahead.

Other sources said the meeting was in agreement in principle that the matter be sorted out as quickly as possible to avert a crisis.

Allowances

The sources said the meeting looked at consequences that would follow in the event that the matter is not resolved fast, which included members moving to have the House dissolved.

The other scenario that was deliberated was that of MPs moving to increase their salaries using the Akiwumi report in order to use the difference in the increment to pay the taxes.

The meeting was also told of a scenario where the Bills on implementation of the Constitution could be frustrated in the House, which means Parliament would stand dissolved.

"If Parliament is dissolved now not much has been done to prepare the people for a transitional government," added the sources.

But on the other hand, the sources said KRA officials were of the view that anything that is in conflict with the Constitution is null and void, and that the so-called "gentleman’s agreement" reached between the President, PM and MPs last July could not hold.

The sources said even the legal opinion that was given by the Attorney General warned that it had the potential of being challenged.

On the other hand, the KRA officials are said to have told the PSC that the Constitution for Implementation of the Commission had insisted the current Constitution required all State officers, including MPs to pay taxes.

The KRA official said they had already sent an assessment of the taxes to be paid by all MPs and they were of the view the matter is taken to the Supreme Court for interpretation.

"We are also engaging them as taxpayers in a bid to come up with a tax plan to enable them to comply," added our sources.

The sources said the two parties were looking at allowances that are currently taxed in order to avoid a situation of double taxation.