MPs in Kenya Finally Pay Taxes

June 28, 2011 Taxation in Kenya

Taxation in KenyaKenya is making headway in its recent tax compliance controversy, as the Prime Minister and the leader of the Party of National Unity both stepped forward to pay their owed taxes.

On June 27th the Prime Minister of Kenya Raila Odinga and Mutava Musyimi, a candidate for the 2012 presidential election, made an example to other Kenyan politicians, with both MPs paying their full tax liabilities. So far only four Ministers have met their full tax obligations since the new constitution came into effect.

In August 2010 Kenya instated a new national constitution, part of which mandated that all workers in Kenya pay taxes on their incomes. The rule extends to all Members of Parliament, who had previously enjoyed an exemption from tax liabilities. Since the constitution came into law there has been debate surrounding its interpretation, with some MPs claiming that the tax rules should not apply until the Kenya’s next election, and that perks and allowances received by MPs should not be taxed.

The Prime Minister sought to quell any confusion surrounding the interpretation of the regulations, by paying the taxes due on his allowances, perks and salary since August 2010. Within minutes of filing his tax return, the Prime Minister held a press conference, saying “…I have paid because that is the law. The constitution does not exempt anybody, let alone Members of parliament, from paying taxes”. He went on to address his fellow politicians, saying that all Kenyans, even the lowest paid factory workers and laborers, currently pay their tax obligations, and MPs should be no different.

The Prime Minister reported having paid KES 3.39 million in taxes, and Mutava Musyimi claimed to have paid KES 2.0 million.

Photo by CSIS: Center for Strategic & International Studies