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Tax-Free Pay for Kenyan Lawmakers Draws Ire

Members of Kenya's Parliament are highly paid compared to lawmakers in many other parts of the world. The MPs pay taxes on their basic salary but not on their allowances, which amount to more than four times their salary. In a recent poll, almost all Kenyans interviewed said they want their leaders' allowances to be taxed, and many vowed not to pay their taxes until this happens.

"I love my country and I take the payment of tax very seriously," says one citizen.

A potential tax revolt is brewing in this East African country.

"But I will not pay this tax installment or any other taxes," she added, "In the future until my MP and all other MPs will pay taxes."

At issue is the more than 600,000 shillings a month, or 7,500 dollars, each of the 222 elected members receive on top of their salaries.

The allowances pay for housing, motor vehicles, travel and other expenses.

A poll conducted late last year by the Nation Media Group found that 90 percent of Kenyans surveyed said lawmakers' allowances should be taxed.

The finding may not be surprising in a country where more than half the population lives on less than one dollar a day.

Recent sharp price increases in maize flour and other staple foods have hit the poor especially hard.

Mwalimu Mati heads the government watchdog Mars Group, which organized campaigns and demonstrations calling for allowances to be taxed. "If the MPs will not pay (taxes), then why should the poor pay taxes? We are saying, unless they have got some sort of convincing reason, then let everybody have a tax break," Mati said. "Let us just call it quits as far as paying tax."

Mati estimates that, if allowances were to be taxed, some 600 million shillings, or 7.5 million dollars, could be pumped into the public coffers to pay for healthcare, education, and other public services.

Members of Parliament are taxed 53,000 shillings, or 663 dollars, per month on their basic salary of 2,500 dollars. They say they need the tax-free allowances to meet the many demands of their constituents.

"Even the salaries we earn is not enough to cater for the needs of the individual people in the constituency," Lawmaker Julius Kones explain. "I can tell you, most of the MPs have taken loans to be able to survive. Every other morning when we are at home, you find about 50 to 100 people, every other morning, who need help of one sort or the other: hospital bills, school fees, etc."

Tax revenues collected by the Kenya Revenue Authority account for about 95 percent of total government revenue.

But only a small portion comes from the personal income tax, as relatively few work in the formal sector.

Instead, most of the money comes from a Value Added Tax that retailers levy on the purchase of goods. Watchdog Mati says he thinks retailers and customers are coming up with creative ways to avoid paying that tax.