Mvita MP Masoud Machele on Wednesday protested the move by Kenya Revenue Authority that seeks to deduct monies from the National Government Constituency Development Funds NG-CDF accounts ostensibly as unremitted taxes from NG-CDF committee members’ sitting allowances.
And KRA has backdated the sum to 2003 when the NG-CDF was started.
In Mvita, Machele said KRA wants to deduct as much as Sh5 million from the NG-CDF account.
“Sh2 million is the principle, Sh500,000 is penalties and another Sh2.5 million is in interests,” Machele said.
He appealed to the NG-CDF board to intervene.
“KRA says every sitting allowance should be taxed. The sitting allowance is Sh5,000. This has been backdated to 2003. This is a new system meaning in the previous regimes no tax was taken from the sitting allowance,” Machele protested.
He said if the sum will be deducted from Mvita’s allocation, it will interfere with the constituency’s programs that have been budgeted for.
NG-CDF Board chair Olago Aluoch, who led the board in touring NG-CDF projects in Mvita as part of the induction of the new board members, including himself, said the deductions will be unfair.
“We are going to get more details from KRA on how this tax applies to the sitting allowance of members of NG-CDF committees. But to backdate demands and then insist that that be paid by the current regime is on the face of not fair,” Aluoch said.
He however pledged to find a way to ensure that the constituency funding is not taken from the bank accounts by KRA.
The KRA has the power to take funds from any account from which it demands money.
He said many fund managers were not aware that they were expected to deduct tax from sitting allowances from members of the NG-CDF committees in the constituencies.
“For most of us, it came as a surprise. We are going to have to consult very closely with KRA to find out how we can get our fund managers in the field out of this mess because it is not only Mvita that is affected. Many other constituencies are affected,” Aluoch said.
Machele said the amount allocated to his constituents is not enough to cater to all constituents and that it is only through prudent management of the resources that Mvita has been doing well.
He called for an increment in the NG-CDF kitty, saying the current amounts are inadequate and coupled with the delays in their disbursement, create problems for development projects.
However, Aluoch said it will be difficult to have the amount increased immediately because the economic situation the country finds itself in at the moment does not allow it.
The NG-CDF Board chair said although Mvita has no adverse report, it will have to make do with whatever it gets at the moment until the economy improves.
He explained that the delays in disbursement of the funds were caused by a lack of proper communication between the board, the National Assembly committee on NG-CDF, and the National Treasury.
He said the delays would be a thing of the past.
“There wasn’t much coordination. The board has agreed that we are going to coordinate and be a bridge between the Treasury and Parliament so that we understand what the problem is,” Aluoch said.
“Since the last financial year 2022/2023, I’m happy to say that all Sh53 billion has been remitted to the board by the Treasury. As we speak now, the Treasury does not owe the board any monies from the past financial year,” the former Kisumu West MP said.
He said they are now able to fund projects in various constituencies.
The chairman said Kenyans’ negative view of the NG-CDF is misguided because of a few MPs who have not been able to be straightforward with the management of their NG-CDFs.