MPs’ benefits to cost more

 . . . Govt liable for MPs taxes on allowance

KANANELO BOLOETSE

MASERU – The newly announced M5 000 per month petrol allowance for Members of Parliament (MPs) will not be tax-free, contrary to statements by government officials, including Deputy Minister Mathibeli Mokhothu.

Public Eye has established that government will cough up millions of Maloti in taxes on behalf of the MPs who will pocket the controversial M5 000 monthly allowance in full.

The National Assembly on Monday passed the Members of Parliament Salaries (Amendment of Schedule) Regulations, 2020, which will see MPs who are not part of the executive receiving a monthly “tax free” M5 000 petrol allowance, among others.

It means the taxpayers will now fork out over a million Maloti a month on petrol, rent and electricity, among many other perks, for members of the two houses of parliament.

This is besides the over M37 000 monthly salaries that members of the National Assembly and Senate are paid, along with a M3 000 housing allowance per month.

They are also entitled to M2 000 per month for electricity, water and telephone and a M1 000 expense allowance, over and above a sitting allowance of M150 per day.

In total, government will spend over 16 million on MPs benefits annually which is enough to buy Covid-19 vaccine for 78 000 people at a cost of M200 per person.

In January this year, it was reported that eSwatini aimed to vaccinate all its 1.3 million people against Covid-19 and had set aside at 200 million Emalangeni (M200 million) to do so.

Public Eye has established that taxpayers will also fork out the taxes on the MPs’ benefits, and this was confirmed by Advocate Lebohang Maema, Clerk to the National Assembly.

This is because according to the Income Tax Act No 9 of 1993, income tax is imposed upon all persons earning income, being individuals, partnerships, companies or any other taxable entities.

Pay As You Earn (PAYE) is charged from employee’s employment income which includes salaries, bonuses allowances, overtime payments, commission, gratuity, severance pay and other incomes.

And, according to the Lesotho Revenue Authority (LRA) Act No 14 of 2001 only the board of LRA has powers to recommend to the minister of finance the criteria for granting tax exemption.

When the minister of finance grants tax exemption in accordance with the criteria recommended by the LRA board, he publishes such a notice in a gazette.

“The M5 000 petrol allowances are said to be tax free because the beneficiaries are going to get it as it is, they will not pay tax but that does not mean tax is not paid at all,” Maema said yesterday.

“The parliament’s human resource office and LRA (Lesotho Revenue Authority) will work together to determine how much tax has to be paid on the benefits and it will be paid by government,” he added.

Former Deputy Prime Minister, Mothetjoa Metsing, who was minister responsible for parliamentary affairs from 2012 to 2017, also told Public Eye that saying the benefits were tax free did not mean tax is not paid at all.

“The government bears the tax liability resulting from such allowances,” Metsing, a leader of the former ruling Lesotho Congress for Democracy (LCD) said.

Metsing is against the M5 000 petrol allowances given to MPs.

He has said government’s timing for tabling the Members of Parliament Salaries (Amendment of Schedule) Regulations, 2020 in the National Assembly was wrong as the country is currently in the middle of the Covid-19 pandemic.

Restrictions imposed by the government to battle Covid-19 have left lasting damage on untold numbers of Basotho, especially the nation’s already suffering working class and the unemployed who have felt the worst effects.

The pandemic dealt a blow to an already stuttering economy, pushing many more households deeper into poverty.

Prime Minister Dr Moeketsi Majoro has acknowledged the damage the pandemic has wrought.

“It is inconsiderate that members of parliament have rewarded themselves with M5 000 petrol allowances when everyone is struggling and many families across the country do not know where their next meal is coming from,” Metsing said.

Passing of the Members of Parliament Salaries (Amendment of Schedule) Regulations of 2020, on Monday aroused widespread anger among Basotho.

A group of concerned youth, the Marematlou Freedom Party (MFP), Alliance of Democrats (AD) and Youth League of the Movement for Economic Change (MEC) released statements bashing government and the MPs.

“As young people in this beautiful country, who have lived in poverty from birth to the present, we are hugely infuriated by the Members of Parliament’s unanimous decision to give themselves M5 000 tax-free petrol allowances,” a group of youth said in a statement on Wednesday this week.

The group added: “This is ludicrous, especially at a time when businesses are shutting down, workers losing their jobs due to the coronavirus pandemic and public sector workers have no pay increases.”

“This kind of behaviour by our elected representatives points clearly to one thing; that our parliament has declined and has become a clique of a privileged few, totally out of actual touch with the plight of the ordinary citizens,” the youth added.

Another civic activism leaning youth group also said this week that they were appalled by MPs’ decision to allocate themselves a tax-free allowance over and above their already high salaries and other perks.

According to their statement, in other countries MPs’ salaries have been cut to meet the costs of emergencies arising out of the coronavirus pandemic “…but our MPs decided that this is the right time to arrogate to themselves the ownership of the nation’s hard earned funds,” the letter read.

The youth said this behaviour shows that parliament has become a circle of a privileged few who are out of touch with the plight of ordinary citizens.

“These few privileged have forgotten about improving Basotho’s living conditions,” said the youth.

The decision by the MPs, according to the statement, is enough to stir into revolt any section of the population, especially the youth a large number of whom has never received a bank notification that M5 000 or more has been deposited into their bank accounts.

“…our youth are disenfranchised, they are yielding to more oppression and suffering and have remained impotent under excruciating circumstances,” they said in a statement.

On behalf of the alienated youth, they plead with government to enact the Remuneration of Public Office Bearers Act to provide a framework to determine the salaries and allowances of the Prime Minister, Deputy Prime Minister, Ministers, MPs and members of the Senate as soon as possible.

The move by MPs comes at a time when civil servants have had to go for a second year without salary increases while the few still lucky enough to have a job post-COVID-19 cannot dream of any salary increment as employers are struggling to keep businesses alive.