The High Court in Nyandarua has rejected a challenge by a firm in a Special Economic Zone (SEZ) seeking to block the county government from charging cess fees on herbs destined for export, ruling that the levy is a permissible fee for services rather than an unconstitutional tax.
- •Royal Herbs, a Special Economic Zone enterprise that transports fresh herbs daily to Nairobi for export markets, had asked the court to nullify Section 8 of the Nyandarua County Finance Act, arguing that counties have no authority to impose charges on export goods.
- •The company claimed cess amounted to double taxation, violated national tax powers under Articles 209 and 210 of the Constitution, and undermined Kenya’s SEZ policy by disrupting time-sensitive supply chains.
- •The dispute escalated after county officials impounded one of the company’s trucks in April and demanded KSh 161,000 before releasing the consignment of perishable herbs.
“The Constitution of Kenya provides as follows: The national and county governments may impose charges for the services they provide. The petitioner has failed to prove how payment of the cess amounts to taxation,” Justice Waweru Kiarie ruled.
The petitioner had argued that the detention interfered with the free movement of goods and was inconsistent with the law.
The county defended the levy as a user fee linked to its mandate over agriculture and rural infrastructure. It maintained that cess is charged for services such as road maintenance and produce inspection, which authorizes counties to impose charges for services they provide.
Justice Kiarie agreed with the county, noting that cess serves a different purpose from taxation and does not fall within the constitutional restrictions governing taxes imposed on imports or exports.
Justice Kiarie drew a sharp line between a tax and cess, grounding its reasoning in standard legal definitions. A tax is a compulsory charge imposed to raise broad public revenue, covering everything from income to property and trade.
A fee, on the other hand, is tied to a specific service or benefit provided to the paying entity such as road use or inspection of produce. Legal scholarship cited by the court underscores that fees must be proportionate to the cost of the service delivered and cannot be diverted into general government spending.
The court found no evidence that the levy duplicated a national government tax or constituted double taxation, and said the petitioner had not shown how cess exceeded the bounds of a service charge.
