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Titanium firm wins road levy row with Mombasa

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An earth mover collects titanium for further production at Base Titanium company in Kwale. FILE PHOTO | NMG

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Summary

  • Kwale titanium miner Base Resources has successfully stopped Mombasa County from charging an Sh3,000 levy on its vehicles to access the country’s main port through a road constructed and managed by the national government.
  • The Supreme Court ruled that the county could not levy charges for use of a road owned by the national government, setting a precedent that if applied across the country will cost counties billions in revenue.
  • The apex court ordered Mombasa County to refund Sh1.5 million that the miner paid for use

Kwale titanium miner Base Resources has successfully stopped Mombasa County from charging an Sh3,000 levy on its vehicles to access the country’s main port through a road constructed and managed by the national government.

The Supreme Court ruled that the county could not levy charges for use of a road owned by the national government, setting a precedent that if applied across the country will cost counties billions in revenue.

The apex court ordered Mombasa County to refund Sh1.5 million that the miner paid for use of the Likoni-Ukunda road.

“The road in question is the Likoni-Ukunda Road (A14), which falls directly into the category of a national road. It is not a county road, and the cess imposed by the County Government of Mombasa was improperly imposed and not a charge for service as contemplated by Article 209 (4) of the Constitution of Kenya,” the Supreme Court ruled.

Mombasa had won cases at the High Court and Court of Appeal, which held the devolved unit has the power to levy taxes and charges for services, including road transport services.

In the Supreme Court, Base Resources argued that the county did not demonstrate which services were offered, marking the receipts issued as “miscellaneous income” or “Likoni Revenue Barrier”.

County governments, which are hard-pressed for cash, have been expanding avenues for collecting extra home-grown revenues due to delays in exchequer disbursements and growing internal expenses.

During the third quarter of the last financial year, counties generated Sh25.52 billion, which was 45.6 per cent of the annual target of Sh56.02 billion, according to reports by the Controller of Budgets.

Mombasa had estimated it would collect Sh5.2 billion but only managed less than half of this, collecting Sh2.4 billion. It expected the national government to fund Sh7.4 billion from the exchequer and Sh1.1 billion as conditional grants.