Manufacturing companies with inter-county operations have been dealt a major blow after the High Court dismissed a case challenging multiple-taxation by county governments.
Kisumu-based United Millers Company Ltd had challenged the decision by 46 county governments to charge it for various licences to deliver goods within their respective jurisdictions.
The duplicated trade licences demanded by the devolved units include single business permits and levies for distribution and branding of vehicles used to ferry the goods.
High Court judge Fred Ochieng', when dismissing the application, said while the company’s complaint was genuine, there was nothing unconstitutional about the different Finance Acts passed by the various counties.
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“It does appear to me that the petitioner might have a legitimate complaint about multiplicity of distribution fees. It probably makes the cost of products more expensive to the ultimate consumers, especially if such a consumer buys the product at a county that is far-off from the county where the product is manufactured or produced,” said the judge in the judgment delivered on April 25.
He said the current confusion could have informed a new draft policy that suggests county taxes, fees and charges should either be levied at source or at destination.
“County taxes, fees and charges should be levied at the source or destination of transportation of goods in question (including within the same county),” reads part of the draft National Policy to Support the Enhancement of County Governments’ Own-Sourced Revenue.
In its response, the Narok County Government told the court it only levied cess on the agricultural products such as wheat and maize that the miller sourced from the ground.