County ordered to stop collecting titanium levy

The Kwale County government has been directed to suspend a levy it has imposed on titanium mining.

The chairman of the Transition Authority (TA), Mr Kinuthia Wamwangi, said the Constitution does not list mining as a county function, and “the levy is, therefore, unconstitutional”.

In May, the county government, through its Finance Bill, imposed a charge of Sh5,000 on every tonne of titanium ore mined.

The county then went ahead and slapped Base Titanium Company with a bill of Sh378,060,000 in a “titanium cess”, which has since risen to Sh500 million.

“The Constitution is the supreme law and binds all persons and state organs at both levels of government. No person may claim or exercise state authority except in accordance to the Constitution,” said Mr Wamwangi, in a letter to Kwale Governor Salim Mvurya.

The Constitution vests the power of administration of minerals with the National Government, raising questions of the legality of the cess that the county government purported to impose, he said.

Under Part IV of the Public Finance Management Act, Section 161 provides that the county shall ensure that the tax or measure conforms to Article 209(5) of the Constitution and any other legislation and shall seek views of the Treasury Cabinet Secretary and the Commission on Revenue Allocation (CRA). This did not happen in the case of Kwale, Mr Wamwangi said.

He noted that a similar tactic had been used by the Mombasa County government in its own Finance Act by introducing cess on “undefined products entering the county”.

The counties have recently been on the firing line over illegal levies they have introduced, and which have been termed as Non-Tariff-Barriers (NTBs) in the region.