Members of county assemblies (MCAs) have protested against the government’s move to tax the Sh2 million car grants promised to them by President Uhuru Kenyatta as a sweetener for their approval of the Building Bridges Initiative (BBI) Bill.
The MCAs argue the 30 per cent income tax by the Kenya Revenue Authority (KRA) will reduce the grant to about Sh1.4 million, which they say is inadequate to buy their choice vehicles.
They now want the President to intervene and compel the Treasury to issue a legal notice exempting them from having to pay the tax.
“We’re talking about getting about Sh1.4 million and not the Sh2 million hyped when President Kenyatta offered us the grant. We’re shocked that the grant will be taxed,” said the Lamu Mkomani MCA Yahya Ahmed Shee, terming the tax a means to benefit KRA and not a “motivation” for them to pass the constitutional amendment Bill.
Sh1.4 billion taxes
The taxman could raise nearly Sh1.4 billion from the MCAs, if a waiver is not granted on the inducement expected to cost taxpayers Sh4.5 billion.
Mr Shee says he supports BBI, but is bitter about the tax.
“We are not opposing the BBI, we shall approve the Bill in our Lamu County assembly,” said Mr Shee.
His Boni Ward counterpart Deko Barissa also opposed the tax, adding the cash would not be adequate to buy speed boats which are the main mode of transport on the island.
“The tax is a blow to us, it (the cash) will be inadequate,” said Mr Barissa.
KRA Commissioner General James Mburu who said the taxman is looking into the ward reps’ car grants taxation matter, an indication that the government could be willing to grant a waiver for the MCAs.
Look into the matter
The KRA Commissioner General, James Mburu, in an interview said the taxman is looking into the matter, an indication that the government could be willing to grant a waiver for the MCAs.
“We have commenced discussions through the Council of Governors to understand nature of the grant before we make a decision on the same,” Mr Mburu told the Nation.
The BBI Bill requires approval by at least 24 out of the country’s 47 county assemblies for it to sail through to Parliament for more scrutiny before it is presented to the public in a referendum.
The Salaries and Remunerations Commission (SRC) last week approved the Sh4.5 billion car grants for MCAs and their Speakers, paving the way for its implementation.
SRC Chairperson Lyn Mengich who said the commission had reviewed and directed the conversion of the Sh4.5 billion car loan benefit to a transport facilitation benefit in form of a grant for the MCAs.
In a statement sent to media houses, SRC Chairperson Lyn Mengich said the commission had reviewed and directed the conversion of the Sh4.5 billion car loan benefit to a transport facilitation benefit in form of a grant for the MCAs.
Ms Mengich directed county governments to administratively undertake the conversion of the car loans to a transport facilitation benefit in the form of a car grant for Speakers and MCAs.
The SRC said conversion of the car loan facility to a car grant will be undertaken within the available car loan facility funds of Sh4.5 billion and will not affect the counties’ expenditure ceiling.
According to the SRC, MCAs are entitled to car loans of up to Sh2 million payable at three per cent interest within their term in office.
Supported tax
The County Assembly Forum (CAF) Chairperson Ndegwa Wahome (Nyandarua Speaker), Tuesday supported the government’s move to tax the grants saying the law should be followed.
“We are lawmakers and we should abide by it. If the grant is supposed to be taxed, let it be done according to the law,” said Mr Wahome.
County Assembly Forum Chairperson Ndegwa Wahome who supported the government’s move to tax the MCAs’ car grants saying the law should be followed.
The thorny issue of the car grants has lingered since 2013 and has set up the national executive against MCAs who have remained adamant in their push to get the benefit.
MPs have been accessing Sh5 million car grants, in addition to a Sh7 million car loan, which MCAs have argued they also deserve as they too carry out legislative functions.
Uhuru’s car grant offer to 2,224 ward representatives was seconded by ODM leader Raila Odinga, who, while meeting MCAs from Nyanza region, said the representatives had a right to enjoy the privilege.
COURTESY OF THE DAILY NATION