MP honours pledge, pays KRA Sh206,000 tax

By Maseme Machuka and Susan Anyangu

Kangundo MP Johnstone Muthama has lived to his word to have his allowances taxed.

On Thursday, Mr Muthama gave the Kenya Revenue Authority two cheques of Sh206, 479 as tax from his salary and allowances of Sh888, 266.

He said he would pay his taxes until his parliamentary term expires.

Kangundo MP Johnstone Muthama with documents he received after paying his taxes. He at his office in Gigiri, Nairobi, on Thursday. [PHOTO: PIUS CHERUIYOT/STANDARD]

Speaking at his private offices in Gigiri, Nairobi, the MP said he chose to follow the common law after the House shot down a clause in the Finance Bill, which would have provided for MPs to pay tax.

In his letter dated November 26, Muthama noted: "My income is Sh888,266,65 before deductions. I have noted that from my November salary, only Sh53,932 was deducted. Its for this reason that I enclose a Sh141,368 cheque to make up the difference."

Commissioner of Domestic Taxes — Large Taxpayer Office, Mr John Njiraini then wrote to the MP thanking him for the gesture. He said the deductions were made under Section 3(2) of the Income Tax Act that provided for the taxation of all gains and profits derived from a person’s employment.

Requisite tax

Njiriani also noted that although the initial responsibility to deduct and remit PAYE tax rested with an employer, the ultimate burden of ensuring the requisite tax was paid rests with an employee.

"Your action to remit tax which you consider as due on your emoluments is therefore entirely in order. Such action is consistent with the tax self-assessment policy, which allows tax payers to voluntarily declare the incomes they consider taxable and to remit taxes due thereon," read Njiriani’s letter.

On Wednesday, KRA wrote to Muthama, who is also the Deputy Chief Whip, confirming receipt of the two cheques number 115171 for Sh140,368 and 115174 for Sh65,111.

Muthama urged his colleagues, who had shown intention to pay taxes, to use the common law and stop hiding behind parliamentary law.

"Before the law, we are equal. Kenyans expect their elected representatives to lead from the front," he said.

Finance bill

Meanwhile, lawyers have asked President Kibaki not to assent to the Finance Bill. LSK Chairman Okong’o Omogeni said Kibaki should beware of moves by MPs to reject a clause in the Bill that would subject their allowances to taxation.

"We request the President to refuse to assent to the Bill as currently drafted since it has no provisions for MPs and other constitutional office holders to pay tax on all their allowances and emoluments," Mr Omogeni said.

He urged Kibaki to send back the Bill to Parliament.

Omogeni said should the President heed the advice, MPs would have no option but to toe the line.

MPs would need a 65 per cent vote of parliament to overrule the President.

Omogeni said the President should read the public mood.