Counties

Driving schools sue counties in tax row

case3

Summary

  • Under the auspices of the Kenya Driving Schools Association, the institutions claim that county governments have unlawfully demanded payment of taxes from them for displaying driving school addresses and the caution “driver under instruction” sign.
  • According to the association, the county governments claim that the caution “driver under instruction” sign on their training vehicles amounts to branding.
  • Through Matata & Mwabonje Advocates, the association in its petition at the High Court in Mombasa says that county governments have imposed different charges for branding motor vehicles.

Driving schools across the country have sued the 47 county governments and the Council of Governors over alleged imposition of illegal taxes on the pretext of branding and advertisements of their training vehicles.

Under the auspices of the Kenya Driving Schools Association, the institutions claim that county governments have unlawfully demanded payment of taxes from them for displaying driving school addresses and the caution “driver under instruction” sign.

According to the association, the county governments claim that the caution “driver under instruction” sign on their training vehicles amounts to branding.

Through Matata & Mwabonje Advocates, the association in its petition at the High Court in Mombasa says that county governments have imposed different charges for branding motor vehicles.

The association is seeking a declaration that display of names and addresses of driving schools on the vehicles and marking them with ‘driver under instruction’ banner as mandated by the Traffic Act does not amount to branding, marketing or advertisement.

It claims that the county government of Mombasa has imposed a Sh12,000 charge for vehicle branding per vehicle yearly.

The association says the county government of Embu has imposed a branding charge of Sh6,000 to Sh10,000 for different categories of vehicles per year.

It also argues that the county government of Vihiga has imposed a branding charge of between Sh3,000 and Sh10,000 for different categories of vehicles per year.

“Members of the association are suffering heavy financial loss and burden as a result of the respondents’ unlawful imposition of taxes, levies and charges,” argues the association.

The association also says that under the Traffic Act, the vehicle used for training purposes must exhibit the name and address of the driving school marked in a manner which is clearly visible by a person in front and the rear of the vehicles with words “caution driver under instruction”.

“The primary issue that this petition raises is whether a party is liable to pay taxes or levies in undertaking an act to ensure that it complies with an obligation placed by a statute,” argues the association.

It also wants a declaration that any county government legislation that imposes an obligation on driving schools to pay branding, advertisement or marketing taxes when displaying their names and addresses on their training vehicles is unconstitutional, null and void.

The association also wants a declaration that driving schools are exempted from paying branding, advertisement, marketing taxes, levies fees and charges imposed by the county governments when displaying their names and addresses on their vehicles.

In his supporting affidavit, John Osiemo, a proprietor of a driving school says that he has been approached several times by agents of the county government of Mombasa to pay taxes on his vehicles bearing names of the driving school.