Mutunga leaves MPs in the lurch over taxes

Judges have bowed to pressure and agreed to pay taxes, leaving MPs isolated in their opposition to the move.

Chief Justice Willy Mutunga who is not affected by the demand for back taxes by the Kenya Revenue Authority (KRA) has asked the taxman to compute the amounts owed by judges.

Yesterday, Commissioner of Domestic Taxes John Njiraini and other KRA officials met Chief Justice Mutunga and High Court registrar Lydia Achode.

The meeting at the Chief Justice’s offices is understood to have been called after Dr Mutunga asked the taxman what the Judiciary needed to do to comply with the tax requirements.

The overture was made two days after the Chief Justice was sworn in and effectively puts Dr Mutunga at the centre of the debate on tax payment by offices previously exempted by the old constitution.

It is understood that the Chief Justice believes that no Kenyan should be exempt from taxation.

Judges are among public officials the taxpayer wants to draw into the tax net and it is understood they have opted for discussions with the KRA instead of the confrontational approach preferred by MPs, who have vowed not to pay up.

Like MPs, judges have also been anxious over the taxman’s announcement this week that they are expected to pay tax on their allowances backdated to August 27 last year, the date of the Constitution’s promulgation.

Mr Njiraini told Saturday Nation that it was rare for taxpayers to contact KRA on how and when they can start remitting the monthly dues.

“What I can confirm is that the Judiciary has contacted us and it is ready to pay. I encourage the other institution we have written to follow suit,” he said earlier. 

The taxman knows exactly what that kind of a call can unleash, especially because of the history KRA has had with MPs and other holders of constitutional offices.

KRA has twice attempted and failed to have MPs pay tax. And in both attempts, the efforts were thwarted by court rulings because the old Constitution allowed the exemptions. 

That is why the President, MPs, commissioners and judges have enjoyed tax exemptions.  

But this is no longer the case as the new constitution clearly states in Article 210(3) that “No law may exclude or authorise the exclusion of a State officer from payment of tax.”
The Constitution Implementation Commission has interpreted it exactly that way: nobody, and CIC chairman Charles Nyachae emphasises, nobody is exempted. 

Mr Njiraini could, with a sigh of relief, refer any aggrieved party to the Supreme Court for interpretation. He knows what that means. 
“I appeal to the MPs and any party that thinks we are not following the law to refer that matter to the Supreme Court,” Mr Njiraini is on record saying.

Kinangop MP David Ngugi said MPs would take the matter to the Supreme Court once its judges are sworn in.
Mr Ngugi accused the Government through the Kenya Revenue Authority of violating the rights of MPs by seeking to impose tax on their allowances mid-stream.

Highest court

“We will go to this highest court, not for interpretation of the law, but to present our case because our human rights have been violated by those who want to vary our contract illegally,’’ said the Kinangop MP. 

Mr Njiraini said previous attempts in 2007 and 2009 to force MPs to join the rest of Kenyans in paying taxes failed due to the old constitutional order which the lawmakers could easily manipulate to  their advantage.  

“Previously, our hands were tied by  the law, but  now anything that is  contrary to the constitution is null and  void. The law is on our side,’’ Mr Njiraini said.