By Luke Anami and Paul Wafula
Nairobi, Kenya: A proposed remuneration breakdown for top 3,600 State officers – including Governors, Senators and Members of Parliament – to be elected next month, is out and awaiting approval.
If approved, it would cost the taxpayer Sh1.6 billion annually. This is the cost of managing the new devolved units, expanded legislative and representative institutions, as well as new constitutional offices.
The raft of salary bands drawn by the Salary Remuneration Commission (SRC), which is mandated by law to oversee compensation of all State officials, entails a drastic reduction in the earnings of all public servants, including the President and Members of Parliament.
It also caps a ceiling at allowances for all cadres of public servants, including the President’s which will not go beyond Sh525, 000 a month. This will end the cunning way in which MPs have always allocated themselves a lower taxable salary and extremely high set of allowances, as a strategy of concealing their earnings and escaping the taxman’s dragnet.
The proposals will now be tabled for public debate starting Thursday, for approval before being forwarded for implementation.
If the proposals by the Salary Review Commission (SRC) go through, Kenya’s Fourth President would take a 35 per cent pay cut.
In a bold move to rein in on the ballooning public sector wage bill and cut down on public sector extravagance, SRC proposed a minimum of Sh1.3million monthly pay and a maximum of Sh1.75million for the new president. This translates into a pay cut of between 12.5 per cent and 35 per cent respectively from the Sh2million earned currently by President Kibaki.
His or her deputy will also earn a maximum of Sh1.4million per month down from the current Sh1.9million.
In a departure from the past, the President and other State officers will not manipulate allowances, which have been set by the SRC.
Allowances for the President have been set between a minimum of Sh393, 750 and Sh525,000 a figure that can neither be reduced nor increased.
The rest of State officers’ allowances have also been included to avoid a situation where they increase allowances as they like.
However, the Speaker of the National Assembly and the Chief Justice should expect little changes in their pay after the salaries body set a maximum of Sh1.4million monthly pay for the Speaker and Sh1.3million for CJ. The first Speaker of the Senate is expected to earn a maximum of Sh1.3million.
Using the current remuneration rate, the 3,670 state officers will cost the taxpayer Sh14.73 billion annually. But the commission estimates the new structure will bring this cost down to Sh13.04billion.
Cabinet secretaries, who will replace Cabinet ministers after the next General Election, will earn a maximum of Sh1.1million, similar to what the Chief of Defence Forces will receive.
“The current wage bill is neither affordable nor sustainable. The country has far surpassed the fiscal and economic benchmarks such as fiscal sustainability. This has the effect of not only eliminating resources for development expenditure but also creating a wage spiral within the private sector,” Mrs Sarah Serem, the SRC chief, said yesterday while launching the proposed remuneration package for State officers in Nairobi.
Governors of the 47 counties will each take home a minimum of Sh833, 755 and a maximum of Sh1.1 million a month while Senators will earn a minimum of Sh555, 696 and a maximum of Sh740,927.
Governors are ranked in salary ‘B and A’ alongside Cabinet Secretaries, Chief Justice, chairman of the Independent Electoral and Boundaries Commission, Attorney General, Judges of the Supreme Court, and Chief of Defence Forces.
MPs will now earn a maximum of Sh740, 927 and a minimum of Sh555, 696, from over Sh850, 000 members of the tenth Parliament earned.
This means that senators and MPs will earn the same salary.
However, MPs will not evade paying tax in the proposed salary pay. Members of the tenth parliament earned a basic pay of Sh200, 000 which was the only figure subjected to tax. The rest of the allowances totaling to Sh650,000 were tax-free.
“All basic salaries right from the President to MPs will now be subject to tax,” Ms Jacqueline Mugo, SRC commissioner explained.
“The basic salary of MPs which is Sh555, 696 will now be taxed. The same applies to all the State offices that SRC has established,” she added.
The Chief Justice will now take home Sh1.03 while a County Governor will earn minimum of Sh833, 755 and maximum of Sh1,111,673. Senators in the newly created National Assembly will take home a minimum of Sh555,696 and maximum of Sh740, 927. Senators also fall in exactly the same wage bracket as MPs and all are in salary B.
Members of the County Assembly will earn a minimum of Sh118,181 and maximum of Sh157, 574 per month. Councillors in the previous Central Government set up earned Sh30,000 but represented just a few locations but now a county ward is on average almost five times larger.
The new structure has also harmonised the pay for all the constitutional commissions set up after the passage of the new Constitution. The chairmen of Public Service Commission, Teachers Service Commission, Transition Authority, Ethics and Anti-corruption commission and the chair of the Commission on Revenue Allocation will now earn a flat rate of Sh750, 000 on the higher side and Sh562, 500 on the lower side.
SRC arrived at the proposed figures with assistance of a consultant, Price Waterhouse Coopers who conducted a Job Evaluation for all State offices. The process focused on job evaluation, assessment of level of skill or competency required, and comparison to international practices.