How MPs plan their hefty pays

Makaayamawe · 2009-04-27T10:18:40+00:00

How MPs plan their hefty pays 2009-04-26 13:20:20 By Staff Writers At a time when the world`s economy is suffering and millions across the globe are facing pay freezes, pay cuts or retrenchment, Tanzanian lawmakers are asking to raise their salaries at par with the MPs of countries with exponentially higher budgets. The MPs, who currently make 7m/- ($5,292) per month - only 1.8m/- of which is their taxable basic salary - want to increase their basic salary to 3m/- and additional allowances to 9m/. The proposed 12m/- ($9,078) package would put the Parliamentarians in the range of Kenya`s MPs, who earn a minimum of Ksh851,000 ($11,335) every month, of which only the basic salary of Ksh200,000 ($2,664) is taxed. Some of the allowances making up additional Ksh651,000 ($8,560) include funds for gym memberships and unspecified `entertainment` costs. Ugandan lawmakers pocket the least of MPs in the region, bringing home Ush2.6m ($1,214) in base monthly salary and Ush7m ($3,271) including night, subsistence and fuel allowances, according to The Monitor newspaper. This income is still far above average salaries in most other sectors, the newspaper says. To put things in perspective, with the proposed salary Tanzanian MPs would make $108,936 per year, while Kenyan MPs currently make $136,020 per year. Members of Congress in the United States make $174,000 a year, which is all taxable income unlike the Tanzanian and Kenyan salaries. Tanzania`s GDP is $16.18bn and Kenya`s is $29.3bn, while the United States GDP is around $14 trillion, close to 1,000 times the size of Tanzania`s economy. Should the proposed increase in pay go through for parliamentarians, Tanzanian MPs will be earning close to $30,000 more than their South African equivalents, who now earn R714,618 ($79,822) a year after giving themselves an 11 percent annual salary increase effective last April. Tanzanian and Kenyan MPs are also fighting to keep control over deciding their own salaries. Whereas in the UK parliamentarians` salaries are determined by a private commission, many African countries give their parliaments full authorisation to push through salary increases for themselves without even final approval from the president. To use the US in contrast again, congressmen do not propose their own salary increases, but instead a statistically calculated cost-of-living-adjustment increase takes effect annually unless Congress votes to not accept it. And beyond that, congressmen can choose to turn down their pay increase, and some do, especially as a symbol now that the recession has put a pinch on the American budget. Given the bleak economy, one of Barack Obama`s first acts as US President was to institute a pay freeze on all White House staff making more than $100,000, including himself. And even as Tanzanian MPs ask for more money from government coffers, most parliamentarians earn some sort of income from business activity outside of their political work, whether as lecturers or businessmen. As is the case in the UK, Tanzanian MPs can also serve as ministers without giving up their post in Parliament, effectively earning double salaries. Pocketing untaxed billions? Lawmakers are pocketing billions of shillings in untaxed allowances, with fresh details showing that taxpayers will dole out 98.2bn/- in per diems and freebies to MPs by the end of 2010. According to a law passed last July, the billions, which do not include the MPs` monthly salaries and fuel allowances, are exempted from the draconian 30 percent income tax that millions of workers in the country struggle to pay every month. A single MP earns a total of 63m/- in allowances, up 50 percent from what an MP earned just four years ago, The Guardian on Sunday has learnt. According to documents seen by The Guardian on Sunday, in 2004/05 a single MP earned 42m/- in allowances annually. With the current number of MPs standing at 312, annually it costs taxpayers 19.6bn/- to foot the bill of lawmakers` allowances. But, should the newly proposed MPs remuneration package sail through, the payments for our lawmakers will double by 2011, putting more burden to taxpayers. The revelation on what our lawmakers are earning apart from their monthly salaries and fuel allowances, comes at a time when MPs are divided on two key issues - whether they should be taxed and whether their earnings should be public. Some MPs have directed the House to ensure that all their earnings be kept secret, while others, mainly from the opposition, want their pay and allowances out in the open. It is also understood that the majority of MPs were recently irked by Karatu MP Dr Wilbrod Slaa`s move to publicly disclose what he was being paid per month. To give context, while an MP walks free from paying 30 percent income tax, a middle-income earner making 18m/- annually pays about 5.4m/- to the government through the Pay As You Earn (PAYE) tax programme. Local economists are turning a raised brow toward MPs for passing a bill that protects them from paying tax in a country of more than 40 million where the tax paying population doesnt exceed 2million. Changed the law for their interests? Lawmakers last year allegedly passed the National Assembly Administrative Bill to overrule the National Income Tax Act just days after the Tanzania Revenue Authority (TRA) wrote a letter to Parliament demanding payment of back taxes from 2004 to 2008. The pending taxes should have been deducted from legislators` hefty allowances and per diem dues during that period. According to sources within the TRA, between 2004 and 2005, each of the 295 MPs at the time were earning 42m/- annually in allowances and per diems, totaling 24.78bn/- in what should have been taxable income. Details made available to The Guardian on Sunday show that from 2006 to 2008, the total monies that MPs earned as allowances and per diems amounted to 58.96bn/-, all of which went untaxed. Officials at the TRA - which has struggled to get revenue figures up over the last few years as the government makes a commitment to shift away from foreign aid - have said that MPs are impeding the authority`s revenue collection and as a result are stifling the country`s development. ``This is very unfair but since they are the lawmakers it has become very tough for TRA to recover the billions, `` said one official who requested anonymity. According to regulations, the bill should not apply retroactively and the outstanding dues from 2004 to 2008 should still be paid to the TRA, the official said. ``When you pass a new law, its application can`t be reversed to the previous acts or pending issuesthat`s why we are puzzled, `` the official remarked. It is not clear why it took the TRA until mid-last year to attempt to collect the back taxes from the parliamentarians, but it was at that time that the authority issued a reminder in writing about the outstanding tax dues. Neither TRA Commissioner General Harry Kitilya nor the authoritys spokesperson Protas Mmanda was available to give further details on the issue. Contacted for comment this week, the Clerk of the National Assembly Dr. Thomas Kashililah, said, ``This is a very sensitive issue that I am not ready to discuss with journalists.`` ``Just contact TRA for more details about the matter, but I am surprised how you got the information,`` the National Assembly Clerk told The Guardian on Sunday. MPs who spoke to The Guardian on Sunday expressed different views on the matter. Some defended Parliaments move on the grounds that lawmakers serve so many people in their respective constituencies. Raphael Chegeni, an MP from the ruling party, said, ``You need to understand the role of an MP in a poor country like ours. A big chunk of our income goes into helping scores of desperate voters who seek our financial assistance.`` ``In principal every income should be taxed, but in this particular case you have to look at the environment that surrounds our lawmakers,`` Chegeni said. ``Allowances are subsistence allowances calculated to make you afford living in a particular area. If TRA will tax this amount then this situation will force either MPs, or the same government, to subsidise their per diems in order to survive.`` But Kigoma North MP Zitto Kabwe said the decision was unfair, emphasising that MPs must lead by example. ``Yes, we passed the Bill, but sometimes we need to review our decisions in order to support this countryI don`t see why our allowances and per diems should not be taxed,`` Kabwe told The Guardian on Sunday. Dr Slaa this week made clear that it was high time MPs started paying tax for their allowances, raising strong criticism from his counterparts especially from the ruling party. In neighbouring Kenya, Finance Minister John Michuki last year withdrew clauses in the Finance Bill that had exempted MPs and constitutional office holders from paying taxes, but parliamentarians refused to respect the change in policy. Though Michukis intention was to facilitate greater revenue collection for the government, MPs were resolute and argued that they already paid taxes amounting to KSh53,000(TSh954,000) each month on their basicsalaries, which stand at KSh200,000(Tsh3.6million) per head. Michuki ultimately softened. He withdrew the tax demand after a closed door meeting with MPs, during which he was reportedly told that the Bill would otherwise be blocked. SOURCE: Sunday Observer

Thread starter Makaayamawe
Start date Apr 27, 2009

Makaayamawe

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Apr 27, 2009

Makaayamawe

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Apr 27, 2009

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