Counties

Salt firms sue Kilifi over 'illegal' cess

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Workers at a salt mine in Kenya’s coastal region. FILE PHOTO | NMG

Summary

  • Four large scale salt producers in the country have challenged a demand for cess for salt by the county government of Kilifi without a supporting legal framework.
  • The companies, which have also sued the County Assembly of Kilifi and the Attorney-General are Krystaline Salt, Ken Salt, Malindi Salt Works and Kurawa Industries, all based in Kilifi.

Four large scale salt producers in the country have challenged a demand for cess for salt by the county government of Kilifi without a supporting legal framework.

They claim that the county, government through its Finance Bill 2018, proposed to increase cess on salt from Sh60 to Sh200 per tonne and further issued a verbal demand for payment for the salt extracted and transported from salt mines.

The companies, which have also sued the County Assembly of Kilifi and the Attorney-General are Krystaline Salt, Ken Salt, Malindi Salt Works and Kurawa Industries, all based in Kilifi.

In their petition filed at the High Court in Malindi, they want an order stopping the county government from levying of cess for salt.

According to the companies, the increment of cess fee affects the cost of extraction, processing, packaging, transportation and exportation of the salt, which in turn has adverse financial impact on the national government.

“There exists no such constitutional or statutory foundation for the levying of cess on salt extraction. Despite the illegal and unconstitutional collection, the county government has never channelled any money collected in form of cess back to the salt industry,” argue the companies.

The firms, in their suit papers, claim that the respondents do not provide any service to them that would warrant to charge cess on salt.

They also argue that they not only contribute towards generating revenue for the national government through salt exportation, but continue to engage in corporate social responsibility projects within the county.

The companies further argue that the salt industry is being forced to deal with extortion coupled with operations that are labour intensive with high cost of maintaining plants and equipment due to heavy corrosion arising from the proximity to sea water.

They argue that the salt industry employs over 7,000 people with an estimated 70,000 community members and traders among other stakeholders depending on it for livelihood.

“The tax burden imposed on the petitioners is a ploy to coerce them to pay the county government and the county assembly money that is not due and owing,” argues the petitioners.

The salt firms also accuse the county government of demanding land rates based on various rates prescribed in the county’s valuation roll and payable to the (county’s) revenue fund.

Krystaline Salt, Ken Salt, Malindi Salt Works and Kurawa Industries further say that over the years, the rates have risen over 1,000 per cent.

“For the respondents to pass a law increasing the rates with an excess of four per cent of unimproved site value, an approval is required from the Cabinet Secretary, which has never been sought,” argue the companies.

The companies said that the formulation process of the draft valuation roll was done without their involvement or consultation yet the county government continues to demand land rates from them and other rate payers.