Owners of wildlife conservancies and eco-lodges in Laikipia have won a reprieve after a court backed their fight against plans by the county government to introduce various taxes and increase the annual land rates from Sh20 to Sh60 per acre.
The High Court quashed sections of the Laikipia County Finance Act, 2024 which had imposed the new levies for lack of adequate public participation. This verdict is likely to affect the county's revenue projections.
Justice Anthony Ndung’u found that although Laikipia county initially intended to raise rates from Sh20 to Sh35 per acre, the Finance Bill was amended at the County Assembly after the public participation sessions, and the amount increased to Sh60.
“The introduction of totally new land rates was a substantial amendment that was not a product of public participation and ought to have been subjected to fresh public participation. For this reason alone, the said increase is rendered unconstitutional,” said the judge.
He made the findings while ruling on a petition filed by the conservancies’ owners under the auspices of Laikipia Conservancies Association.
Also quashed were sections of the Act that introduced taxes on the conservancies such as landing charges at aerodromes, telecommunication installation charges, commercial filming and research levies and motor vehicle sticker charges for motor vehicles used in research.
“A declaration is made that the Laikipia County Finance Act, 2024 violates the Constitution to the extent that it provides for imposition of taxes, charges and fees by the County government which overlap with the functions of the national government,” said Justice Ndung’u.
The association, comprising over 30 conservancies and eco-lodges covering conservation and socio-economic activities in over 4,000 square kilometres of Laikipia county land, told the court that the new levy was exorbitant and punitive.
It sued arguing that the Act increased the land rates by 300 per cent, which they said was inconsistent with previous increment patterns and amounted to unreasonableness and unfairness.
They also contended that the charges applied to the wildlife conservancies only, which amounted to unlawful discrimination.
Laikipia government stated that the annual rates had been Sh20 per acre and economic times have changed adding that the law needed to be altered for economically viability.
The changes were to ensure that the county government was able to maintain the infrastructure used by the conservancies for their economic activities.
Therefore, he said the increase in land rates was reasonable and adhered to the fiscal principles enshrined in Article 201 of the Constitution.
Further, the requirement to pay fees for putting up fences was a mandatory requirement set up in the Physical Land Use Planning Act, 2019.
In addition, the Act introduced land rates on communal conservancies operated on community land which have never been subjected to rates. They said this was a shift in policy without notice.
The conservancies had also fought the Act for imposing new taxes such as airstrips annual permit, special accommodation and food service activities (conservancies and ecolodges), and commercial filming activities in private conservancies.
Another tax involved education and commercial research activities (private conservancies).
They said these levies fell within the exclusive mandate of the national government and this constituted an encroachment on the power granted to the national government and amounts to double taxation.
The contested Act had further introduced levies such as stickers for research vehicles and electric fencing. They said this was threatening the financial viability of the conservancies.
“The imposition of higher land rates on communal conservancies which have been exempt from such taxes is an interference with property rights under Article 40 of the Constitution. This violates Article 201(b)(iii) which requires fiscal policies to promote development and make provisions for marginalised groups,” said the Association.
According to them, the taxes introduced in the Act were against the government’s aim of fostering private sector growth and managing human-wildlife conflict and will lead to significant prejudice.
They also fought the Act for allegedly subjecting them to double taxation by introducing charges that are a preserve of the national government including aircraft landing charges.
It was argued that the aerodromes/airfields operated by conservancies are licensed by the Kenya Airports Authority and they pay a license fee.
In addition, they resisted charges for installation of internet charges saying the function of licensing and regulating such is a preserve of the national government.
The county Government had also introduced tourism license/conservation charges anchored on a bed capacity and license fee for tourist facilities. They said this was already being exercised by the Tourism Regulatory Authority.
In regard to levies for commercial filming and research activities, they said the license fees are payable under the Films and Stage Plays Act.
He explained that though the county government was not mandated to regulate commercial filming, it had the mandate to levy fees for economic activities undertaken within the county boundaries.
Additionally, he said local tourism was a devolved function and therefore, the county had a mandate to levy license fees for accommodation and food services and the same did not amount to double taxation.
However, the court said while the contested rates appeared to the Petitioner both oppressive and exorbitant, it was not within the province of the court to determine what constitutes a fair amount of taxation so long as the process and the outcome meet Constitutional muster.
“The rate of taxation is a policy decision solely within the mandate of the Executive and enacted by Parliament (in this case the county assembly) and so this court ought to decline to make policy decisions which are solely within the realm of the other arms of Government,” said the judge.
He observed that the county assembly’s role should be confined to rejecting any policy decision from the county executive arm that it may disagree with and not to substitute it with its own.
“The residents of the county were not consulted through meaningful public participation in regard to the amendments to the initial Bill. For this reason, the said increase and which was not subjected to public participation is rendered unconstitutional,” said Justice Ndung’u.
The association said it works to promote the sustainable management of natural resources, wildlife conservation, and community development among other purposes.
