MEMBERS of Parliament have written an intransigent letter to Kenya Revenue Authority insisting they will not pay any tax on their allowances.
The letter from the Clerk of National Assembly Patrick Gichohi to KRA Director General Michael Waweru dated July 22 says it is illegal and unconstitutional for KRA to demand additional taxes when transitional clauses in the constitution “preserves the current Parliament as a whole”.
“It is the position of the Parliamentary Service Commission that no monies are due and owing from it to KRA in taxes, penalties, interests or otherwise.
The PSC therefore requests KRA to withdraw its demand for additional taxes which is illegal and unconstitutional. It is the further position of PSC that the status quo should hold until the end of the 10th Parliament,” declared Gichohi.
The letter followed a crucial meeting on July 20 between KRA and Parliament at the Speaker’s office in Parliament.
The KRA was represented by Waweru, Domestic Tax Commissioner John Njiraini and a certain Awuor while Parliament was represented by Speaker and PSC Chairman Kenneth Marende, Finance Committee chairman Chris Okemo, PSC vice-chairman Walter Nyambati and Gichohi.
In the meeting the parliamentary side tabled a letter from KRA and the Finance ministry assuring MPs that they would not pay taxes when the new constitution comes into effect. They also tabled a similar letter from Attorney General Amos Wako.
Parliament argued that according to article 210(1) of the constitution you cannot tax someone without legislation and that the new constitution preserves the current Parliament with all its privileges.
The KRA team told the parliamentarians that the demand for additional taxes was occasioned by the Commission for Implementation of the Constitution and that AG Amos Wako’s letter can be challenged in court.
The KRA advised that Parliament should present an objection letter so that the matter can be negotiated or go to the Arbitration Court. Two days later on July 22, Parliament wrote its objection letter.
“PSC wishes to object to assessment of taxes, penalties, interests and demand as contained in your letter.
The position of PSC is that no monies are due and owing from the commission to authority in taxes, penalties or interest. We are of the view that the demand for KRA for payment of taxes on allowances payable to MPs is not only unlawful, unjust and unreasonable,” wrote Gichohi.
“Article 210 should be read as a whole and not merely parts of it. Article 210 prohibits imposition, waiver or variations of any taxes except as provided by legislation. This is a constitutional requirement,” stated the letter.
A month ago, Njiraini wrote Parliament threatening to seize their bank accounts and properties if MPs do not pay taxes within 30 days.
Prime Minister Raila Odinga, Makadara MP Gideon Sonko, Gachoka MP Mutava Musyimi, Vice-President Kalonzo Musyoka and others then dashed to KRA to their pay taxes.
They joined Gatanga MP Peter Kenneth and Kangundo MP Johnstone Muthama who had already been paying taxes for a year.
It also emerged that President Kibaki and Deputy Prime Minister Uhuru Kenyatta had been quietly paying their taxes.
The PSC letter argues that Kenya National Assembly and Remuneration Act exempts taxation of MPs’ allowances.
“Article 210(1) of constitution must be observed accordingly and legislation put in place to amend Cap 5 of the Remuneration Act.
A demand for taxes on this allowances that does not head article 210(1) is unconstitutional,” states the letter.
The letter states that the Members have been paying taxes as provided for by the law. “Any taxes now required are additional taxes and not areas and will need to be imposed and cleared for in the law as provided for in the constitution.
The action by KRA in making an express and unequivocal by KRA that it will not demand additional taxes and thereby renege in making demands is a clear violation of rights of MPs, its unlawful,unreasonable and procedurally unfair,” states the letter.
“The doctrine prevents KRA from going back on its word,” states the letter. Gichohi states that the application of Estoppel Doctrine is that there was a promise that was reasonably relied upon resulting in the detriment to the promised party. Justice requires enforcement of the promise,” states the letter.
The letter claims that KRA reneging on their promise is illegal. “The doctrine of Estoppel prevents KRA from going back on its word,” stated the letter. “Justice requires enforcement of the promise.”
Source- http://www.nairobistar.com/national/national/33591-we-wont-pay-the-kra-a-cent-in-taxes-say-mps
