Attorney General Amos Wako (pictured) has been credited with the ambiguity in the National Accord reached after the 2008 post-poll violence. File
Parliamentarians, who have not settled their tax dues, will soon get direct demand to pay up as the taxman moves to side-step stonewalling by the Parliamentary Service Commission.
The Kenya Revenue Authority (KRA) says the demand letters will be followed 30 days later by action to recover the tax from non-compliant MPs – a move that could see a number of legislators lose significant part of their salaries or have their property auctioned.
“If there is no objection by a client in 30 days, we will proceed to recover the tax,” said tax officials who did not want to be named to avoid personal battles with the MPs.
The taxman made his intentions known as it emerged that Attorney General Amos Wako did not respond to KRA’s request for a legal opinion on the Constitutional requirement that all Kenyans pay taxes.
The request, made long after Mr Wako gave Speaker Kenneth Marende a legal interpretation suggesting that MPs would keep their pay perks to the end of current Parliament, has received no response to date leaving the taxman to slug it out alone with the legislators.
Lawyers said Mr Wako’s silence is informed by the realisation that he has no legal authority to offer an opinion on a Constitutional matter that is squarely in the province of the Supreme Court.
“Mr Wako is conscious of the fact that his opinion on the matter of taxation has no legal grounding,” George Kegoro, the director of ICJ Kenya chapter told the BBC in an interview.
“In fact, it is not unimaginable to argue that he was aware of this fact even as he gave the speaker the legal opinion that is at the centre of the controversy,” he said.
That understanding is the main driver of the popular view that Mr Wako simply tricked the MPs into passing the new Constitution at a time many were wavering and their support was critical to the success of the plebiscite. It is the latest, and most likely the last, in a string of major tricks Mr Wako has pulled out of the proverbial hat in the 22 years he has served at the State Law Office.
Mr Wako’s list of major legal tricks includes his attempt in the early 1990s to deny opposition campaign time in the run up to the first multi-party elections by replacing key words in draft electoral law – ‘not less than’ with ‘not more than.’
Mr Wako is also credited with altering key sections of the 2005 draft Constitution leading to its rejection at the referendum. It has been argued that by making the alterations, the AG, who is a key supporter of the status quo, gave the pro-change forces then led by Prime Minister Raila Odinga, a rope to hang in the campaign to defeat the proposed law at the referendum.
More recently, Mr Wako has been credited with the ambiguity in the National Accord that tricked Mr Odinga and his ODM supporters that they were forming a government of equal partners after the 2008 elections crisis while in reality leaving power in the hands of President Kibaki and his side of the coalition. Mr Wako is one of the State officers required to pay tax on benefits but KRA officials did not indicate whether he has since paid up.
“I can’t confirm whether he has paid but there is no problem as we can take his retirement benefits if he will not have settled the matter by the time of leaving office next month,” said a senior tax official.
The AG, who must vacate his position in six weeks time, has maintained studious silence in recent weeks as the Charles Nyachae-led Commission on the Implementation of the Constitution (CIC) pushed the Kenya Revenue Authority (KRA) to bring all public officers, including MPs, in compliance with the Constitutional requirement that they pay taxes.
MPs have continued to argue that they cannot pay the taxes because the AG, KRA and Finance minister Uhuru Kenyatta had committed to letting the status quo remain until the next general election.
Some parliamentarians have even suggested that they will force Mr Kenyatta to bring to the House a Bill reflecting the recommendations of the Akiwumi Commission for passing before they start paying taxes.
The commission had recommended that the legislators’ pay be increased from Sh850,000 to Sh1.1 million adding them Sh160,000 enough to pay taxes and leave their net pay untouched.
The taxman is expected to find direct recovery of taxes from MPs a tough assignment given the poor status of the legislators’ pay slips.
Some MPs are known to have over-leveraged their salaries leaving no possibility for additional commitments. That might force the taxman to wait until the end of next year to recover the debt from their severance benefits.
MPs owe the taxman up to Sh600 million accumulated in the past year alone and the figure is expected to rise to more than Sh800 million by the time Parliament is dissolved in August next year.
In the past couple of weeks, the President, Prime Minister and Vice President and some MPs have paid their dues and Chief Justice Willy Mutunga has said the Judiciary will comply with the constitutional requirement.
Mr Kenyatta’s aides said he had paid up and is in full compliance but has opted to keep the information under wraps to avoid antagonising some of his allies who are opposed to paying taxes.
Mr Marende has in the past leant on the Wako interpretation that MPs would not pay taxes as stipulated by the Income Tax Act Cap 470 but a keen reading of the legal opinion shows MPs were merely tricked.
A trail of communication between Mr Wako, KRA commissioner general, Mr Marende and Mr Kenyatta indicates that the assurances that the Speaker has insisted he received from senior government officials was based on the AG’s word — which was clearly unbankable even for untrained legal minds.
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