Analysis And Determination
8.The petitioner filed its petition on 2nd August, 2019. That petition sought the declaration of unconstitutionality of the Kiambu County Finance Act 2018. By the time this petition was heard, the said Act had been repealed. The petitioner at its request was granted leave on 13th June, 2022 to amend its petition to plead the new law. The amendment to the petition, that was brought forth reflected the changed law, that is the Finance 2020. The sections and schedules challenged by the unamended petition remained the same in the Finance Act 2020. The order of leave to amend the petition required the petitioner to serve the county government with the amended petition. My perusal of the court file does not reveal an affidavit evidencing such service. There is doubt that service of the amended petition was served as ordered. Consequently, where need be, I shall make allowance of that non-service of the amended petition to the submissions filed by the county government. I shall bear that uncertainty in mind.
9.Having considered the petition and the replies and the parties submissions, I find that the following are the issues that arise for determination:a.Is the Kiambu Finance Act unconstitutional by virtue of it not getting legislative backing as provided under Article 199(1) and/or by not receiving public participation as required by Article 196(b) and section 115 of the County Government Act.
10.Petitioner’s contention that the Finance Act was not gazetted is in error. The Kiambu County Finance Act 2020 was gazette on 14th December, 2020 by special issue of the Kenya Gazette Supplement No. 15 (Kiambu County Act No. 6).
12.Further, the County Government Act under Section 21, the counties are directed on how to exercise their legislative powers amongst, others, by introducing a money Bill. Sub-section 4 of that Section details what provisions the money Bill should deal with, that is, taxes; imposition of charge on a public fund or variation or repeal of those charges; the appropriation, receipt, custody, investment or issue of public money; or matters incidental to any of those matters.
13.It follows that the Kiambu County Finance Act has the Parliamentary legislative backing and to that extent, has met the constitutional requirements of Article 199. The Public Finance Management Act, in tandem with the Constitution empowers the county to impose permit fees, license fees, rates, rents and other charges in order to raise revenue required to finance county operations.
14.The county, by its replying affidavit proved that the enactment of the Finance Act was preceded by invitation for public participation. The advertisement for public participation, attached to the replying affidavit relate to invitation for public participation for the Finance Act 2018. There is no evidence for invitation to public participation for the Finance Act 2020 but this is where I will give allowance to the county for there is no evidence proving they were served with the amended petition; which amendment challenged the Finance Act of 2020. The invitation to public participation was in a newspaper with national circulation.
15.The need for public participation has variously considered as was in the case BUMASUTRA SAVING AND CREDIT CO-OPERATIVE SOCIETY LTD VS. COUNTY GOVERNMENT OF NAKURU (2016) eKLR thus:-
16.The next issue to determine is whether some sections of the Finance Act contravene the Constitution. The Finance Act under Section 10(1) provides that a person operating business specified under Part 1 of the Second Schedule shall pay annual solid waste management service fee. This is one of the fees demanded from the petitioner.
17.Section 20(1) of the Finance Act requires one who displays advertisement or signage or any other advertisement as specified in Part VII of the Fourth Schedule shall apply for permit from the county government.
18.Schedule 1 Part 11 of the Finance Act requires distributors amongst others, to large traders, shop, retail store to pay an annual license to the county.
19.The petitioner contends that its business premises are located within Nairobi County. The petitioner attached evidence of payment for licenses and permits to the Nairobi County, which licenses and permits are demanded by Kiambu County. It is for that reason the petitioner terms the demand by Kiambu County as double taxation. Although the petitioner argued that the payments required by Kiambu County are not permitted under the Fourth Schedule of the Constitution, I dare say the petitioner is wrong. Under the Fourth Schedule, some of the functions the county governments are authorized to undertake are control of outdoor advertising, liquor licensing, to regulate fair trading practices. I therefore find and hold the licensing and permit fees demanded by Kiambu County comply with the Fourth Schedule.
20.Although the petitioner sought to argue that the demand for those fees by Kiambu County contravenes Article 201(b) (i) which provides that the burden of taxation shall be shared equitably, I find that argument not convincing. The Finance Act of Kiambu County requires those who do trading within the county to pay the necessary fees. Although the petitioner in the affidavit of the petitioner’s director, stated that it had its vehicle impounded while it traversed the County of Kiambu, the officer of Kiambu County deponed that the vehicle was impounded while the driver was delivering merchandise at a supermarket within the county. Such activity is covered under Part 11 Code 105 of the First Schedule of the Finance Act. The petitioner did not respond to the deposition of the Kiambu official but that notwithstanding, and it is very telling the petitioner seeks in this petition orders of prohibition to prohibit Kiambu County levying fee for its distribution within the county. There is tacit admission, therein, that the petitioner does carry on distribution business within Kiambu County. If the petitioner carries on business activities in Kiambu and Nairobi Counties, it implicitly suggests that demand for it to pay taxes and levies by both Counties does not amount to double taxation as required by the Finance Acts of both counties. It does not amount to double taxation when the petitioner carries out business activities in both counties. The basis of payment of those fees is not the residential address of the business entity but rather, the business activities and where that business is undertaken. Further, even as I consider this matter, there is absolutely no evidence of the petitioner’s business residential address. It remained a bare statement, without documentary evidence, made under oath (in an affidavit) by the petitioner’s director that the petitioner carried out business in Nairobi. The burden of proof, for what it is worth, which lies on the petitioner was not shifted at all. The petitioner did not prove to required civil standards that the petitioner is a resident of Nairobi County. That is why I reach a conclusion that there is no evidence that the Kiambu county’s demand locked out the petitioner from accessing opportunities within Kiambu County, as it alleges.
21.In the end bearing the above, I find no basis for declarations sought by the petitioner.
22.In sum, I find that the petitioner failed to prove its case. This petition therefore is hereby dismissed with costs to the County Government of Kiambu.