Government to pay Shs2b to MPs monthly

Parliament- Authorities in Parliament have sanctioned a plan to increase gratuity benefits for Members of Parliament, in a policy shift that seeks among other things to assist the politicians live a comfortable life after Parliament.

The planned consolidation of members pay will, however, be done at a cost to the taxpayer. For the 386 MPs in the 9th Parliament, every month, the government will be contributing more than Shs2.3billion and about Shs27.7 billion annually.

Although it’s not yet clear whether MPs will accept their consolidated pay to be subjected to Pay as You Earn (PAYE) like other salary earners, investigations by the Daily Monitor have revealed that the government’s monthly contribution on each MP’s pension is going to increase from Shs780,000 to Shs6 million.

Because the government runs a contributory scheme, each MP will contribute 15 per cent of their pay—from about Shs390,000 to Shs3 million. This means each month, an MP will be assured of a saving of about Shs9 million.

However, ministry of Finance spokesperson, Jim Mugunga said the ministry was not consulted and advised the authorities in Parliament to drop the idea in public interest. “The planned consolidation of MPs pay was not budgeted for and therefore, we have no budgetary provision for it,” Mr Mugunga said.

Independent analysts, however, said yesterday that any consolidation of MPs’ earnings will only be a good idea if it will increase their tax incidence.

Mr Nicholas Opiyo, one of the analysts, said legislators all ought to pay the same percentage that all other Ugandans pay on their earnings. “To consolidate their pay for solely getting a higher gratuity is selfish and predatory,” Mr Opiyo said.

Under the new arrangement which starts this financial year, both salaries and allowances for the 386 MPs in the 9th Parliament will be paid as a lump sum unlike the current system where the remittances are done separately

When contacted yesterday, the Clerk to Parliament, Ms Jane Kibirige, told the Daily Monitor that the new plan is intended to help the ‘low-income earners’ in Parliament and that there should be no cause for alarm because the government will be compensated through the PAYE charge on the consolidated pay.

Under the PAYE threshold, the MPs who earn more than Shs20 million in consolidated pay will fall under the category of Ugandans who earn Shs10million and above. This bracket according to a URA official, who requested not to be named because he is not the spokesperson, will attract Shs6.9 million tax charge on the gross pay.

While not many people turn down a raise; leading politicians, burdened by their reputation for what the civil society critics yesterday called: “money-grabbing” tendencies, have scoffed at the proposal as an additional cost to the taxpayer and vowed to fight for the right to reject higher pay.

“Any policy shift that adds a cost to the taxpayer should be rejected,” Gilbert Olanyah (Independent, Kilak) said. “We have many demands from the voters, but we should also be cautious of the economic environment. In any case, there is already a perception in the public domain that we are highly paid”.
Mr Opiyo said any consolidation must not lead to a higher earning that the current exorbitant ones but rather spread the tax burden to all their earnings from parliament including allowances.

[email protected]