Win for Kenyans as state loses bid to keep unlawful e-Citizen fees

Demonstration applying of  online registration of marriage services  during  the Resumption and launch of online marriages at sheria house.[FILE/Standard]

The Court of Appeal has dismissed the government’s request to continue collecting the convenience fee charged on Kenyans accessing services through the e-Citizen platform.

Appellate judges Daniel Musinga, Francis Tuiyott and Pauline Nyamweya ruled unanimously that Kenyans should not keep paying the Sh5 to Sh50 fee, which had already been declared unconstitutional.

Justice Musinga, reading the decision, said the scales of justice favoured citizens, who must not be burdened with unauthorised charges. He noted it would also be impossible to recover the money already collected.

“Continuing to collect a fee already declared unconstitutional would undermine the rule of law and burden citizens unlawfully. The greater public good lies in ensuring constitutional compliance, transparency and access to government services without unauthorised charges,” the bench stated.

A core question in the case was who benefits from the daily collections and whether the charges had any legal foundation beyond a gazette notice. The application before the court had been filed by the Treasury Cabinet Secretary, the ICT and Digital Economy CS, and the Attorney General, who argued that firms powering e-Citizen would withdraw their services if the fees were halted.

In 2023, then Treasury CS Njuguna Ndung’u introduced the new charges: Sh5 for services costing Sh199 or less; Sh10 for those between Sh200 and Sh299; Sh20 for Sh300 to Sh499; Sh25 for Sh500 to Sh699; and Sh50 for transactions worth Sh1,000. President William Ruto later directed that all government services be paid through e-Citizen, a move that has since faced three legal challenges, including the ruling that declared the convenience fee unconstitutional.

Yesterday, Nairobi lawyer James Kiogothi Maina filed a fresh petition, arguing that using a paybill to access government services discriminates against the elderly, the illiterate and those without mobile phones. Other litigants include Nakuru-based doctor Gikenyi Magayi and Kilifi Senator Stewart Madzayo.

In Dr Gikenyi’s case, Justice Chacha Mwita earlier quashed the Ministry of Education directive requiring parents to pay school fees exclusively through e-Citizen, citing lack of public participation. Gikenyi argued that the transaction fees were irrational and risked locking out children whose parents cannot access mobile money or who traditionally pay school fees in kind, through cereals or livestock. He further questioned the absence of legislation governing how the collected funds are managed.

Former Education Principal Secretary Belio Kipsang had instructed schools to onboard e-Citizen as part of a national digital payments rollout involving the ICT Authority and the National Treasury. But Gikenyi warned that forcing parents to use the platform violated principles of good governance.

In his petition, Kiogothi argued that the government’s assignment of paybill number 222222 to Safaricom was not competitively procured, shutting out other service providers who could support payments during network outages.

He sued former Treasury CS Ndung’u, former Attorney General Justin Muturi and the Communications Authority, accusing them of breaching procurement laws and failing to protect consumers.

He also noted that the public lacks clarity on how convenience fees are levied, who receives them, and how they are accounted for, adding that they are not reflected in budget estimates. He argued that the single payment platform is unreliable, especially for Kenyans without phones or digital skills.

Senator Madzayo, a retired judge, joined the legal challenge, calling the Sh50 convenience fee illegal as it is not outlined in law.

He sued Prof Ndung’u, Pesaflow Limited which is reported to run the payments system, alongside KCB and Equity banks. Court documents show Pesaflow was incorporated in 2017.