Page last updated at 10:57 GMT, Wednesday, 3 December 2008

Kenya team to probe MPs tax plan

Kenya MPs in parliament earlier this year
MPs only pay taxes on their basic salary of approximately $3,500

Kenya's parliament has set up a committee to review MPs' generous salaries and allowances.

This follows a widespread public outcry over a decision by the country's legislators to drop a proposal to tax their allowances.

Kenya's 222 MPs each earn more than $10,000 (6,800) a month but only pay tax on their basic pay of $2,500.

The country is struggling to finance a 42-member coalition cabinet, and subsidise record-high food prices.

But Johnstone Muthama, one of a handful of MPs who have agreed to pay taxes, criticised the move, saying it is time-wasting gimmick.

"Once a tribunal is formed, it will take two, three years. So whatever advantage that will be brought by the tribunal will mean that the enactment of that act will be put into place in 2017," Mr Muthama told the BBC's Network Africa programme.

He said it was the MPs' obligation to pay taxes and that he had personally remitted more than $3,000 to the revenue authority.

'Parliamentary dictatorship'

In June, then Finance Minister Amos Kimunya proposed that MPs and constitutional office holders should pay taxes in a country where most people live on less than $1 a day.

But MPs unanimously voted against it, in a rare show of unity across party lines, a move which was described by the Kenyan Law Society as the "height of parliamentary dictatorship".

On Tuesday, Prime Minister Raila Odinga said the cabinet will push for a new law to allow the taxation of MPs' allowances.

Mr Odinga said that the cabinet had approved the proposal to tax MPs before it was shot down in parliament.

"Parliament and the executive have divergent views on this subject. But we shall still lobby for taxation of MPs' earnings," said Mr Odinga.

The Parliamentary Service Commission (PSC), chaired by Parliamentary Speaker Kenneth Marende, discussed the proposed taxation and said the special committee would make recommendations on the matter.

Mr Marende said the members of the team would be announced shortly.

Opinion polls show that Kenyans view most of their politicians as unscrupulous and self-serving.

On Monday, the Kenya Anti Corruption Commission (KACA) sued seven current and former members of parliament for taking illegal allowances worth $250,000 (166,000).

Information Minister Samuel Poghisio denied taking 2.8m shillings ($35,000, 23,000) in 2006 and 2007.

Similar allegations have been filed against the assistant defence minister and five former members of parliament.

In April, Mr Kimunya said he may be forced to shift funding from vital programmes like education, health and the resettlement of those displaced in the post-election violence to pay for the new ministries.

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