A county payment demand may carry an official stamp and appear in a Finance Act. But those facts alone do not settle whether the charge is lawful.That is the lesson from a High Court judgment that struck down Kilifi County’s salt cess, following a challenge by four producers.
In the October 2, 2026 judgment, Justice M. Thande declared the challenged salt cess provision in the Kilifi County Finance Act, 2018 unconstitutional and ordered the county government and assembly to stop levying it.
The decision explains the limits of county revenue powers—and why business owners should examine the legal authority, consultation process and justification behind charges.
The dispute behind the ruling
Krystaline Salt Company, Ken Salt Company, Malindi Salt Works and Kurawa Industries challenged a salt levy that had risen from Sh60 per tonne under the 2017 Finance Act to Sh200 under the 2018 legislation.
That was an increase of approximately 233 per cent.
For illustration, a producer handling 1,000 tonnes would face Sh200,000 in cess at the higher rate, compared with Sh60,000 previously. The Sh140,000 difference shows the effect of the rates; it is not a statement of any company’s actual production.
The producers said they sought a reduction during an October 2018 meeting with county finance officials. A subsequent Kenya Association of Manufacturers memorandum proposed cutting the charge to Sh100 per tonne.
Their challenge, however, went beyond the amount. They questioned whether Kilifi had the power to impose the levy at all.
A county Finance Act is not unlimited authority to tax
Article 209 of the Constitution allows counties to impose property rates, entertainment taxes and other taxes authorised by an Act of Parliament.
Justice Thande drew an important distinction: Kilifi’s Finance Act was legislation passed by a county assembly, rather than an Act of Parliament.
The county had not demonstrated that any Act of Parliament authorised it to impose the salt cess. The court therefore found that the levy violated Article 209(3).
For business owners, the practical question is: which legal power authorises this particular payment?
An entry in a county fee schedule is a starting point for checking a charge. It does not remove the need for the charge to comply with the Constitution.
If it is a service charge, what service is provided?
Counties also have power under Article 209(4) to charge for services they provide.
Kilifi defended the cess as a legitimate service charge and argued that the revenue supported essential services for residents.
The court found that explanation too vague. The county had not identified a specific service or amenity provided in exchange for the salt levy.
In paragraph 66, the judge stated:
“the charge is tied to any specific identifiable amenity”
The full finding was that the county had not demonstrated such a connection.
This distinction matters. A service charge should have an identifiable service or amenity behind it. A tax, by contrast, does not necessarily buy a specific service for each individual taxpayer; its legality depends on the applicable taxing power.
Business owners should therefore ask both what kind of charge they face and what justifies it.
The judge also found that seawater and salt extracted from it fell outside the functions assigned to county governments, and that the cess prejudiced economic activity and the movement of goods.
Holding meetings is not enough
Kilifi maintained that it had conducted public participation across seven sub-counties and made the draft Finance Bill available online and in hard copy.
The court examined the county’s own records.
Its public notice said the draft could be obtained from “today”, but the notice was undated. It also gave no deadline for written memoranda.
The participation report recorded a common complaint across the forums: participants had not received the draft bill in good time. It also recorded requests concerning Kiswahili versions, meetings closer to residents and sign-language interpretation.
The judge concluded that the initial public participation was neither meaningful nor adequate.
For business owners, consultation should provide a reasonable opportunity to understand proposed charges and contribute before they become law. Attendance lists alone do not establish that this happened.
Participation also does not guarantee that a county will adopt every objection. The practical approach is to make a clear, evidence-based submission and preserve proof that it was delivered.
What business owners should check
The ruling suggests three useful questions whenever a county introduces or increases a charge:
What authorises it? Identify the exact law and provision supporting the demand.
What is its basis? Establish whether it is a tax, licensing fee or service charge, and check the calculation.
How was it introduced? Examine the notice, access to the proposed law and opportunity for affected people to participate.
Keep invoices, receipts, demand notices, correspondence and copies of submissions. These records help turn a general complaint about unfairness into a specific dispute that officials or a court can assess.
Where an administrative decision affects a business, the Fair Administrative Action Act provides protections including procedural fairness, reasons and applicable review or appeal procedures. Available internal remedies generally must be exhausted before administrative judicial review, unless a court grants an exemption in exceptional circumstances.
The appropriate route depends on the charge and law involved. An objection or court filing should not be assumed to suspend payment or enforcement automatically.
Winning does not automatically mean compensation
The salt producers won the central challenge, but the court refused compensation.
The reason was procedural: compensation had been raised in submissions rather than requested in the petition. The judge held that the court could not grant a remedy that had not been properly pleaded.
That is another lesson for businesses considering litigation: identify the remedies sought from the outset, including any claim for repayment or compensation.
The court made no order as to costs, treating the dispute as a public-interest matter. That outcome does not guarantee the same costs decision in another case.
What the ruling does and does not change
The judgment invalidated the challenged salt cess provision under Kilifi’s 2018 Finance Act. It did not cancel every county business charge or the entire Act.
Businesses elsewhere must assess their own charges and circumstances.
Justice Thande acknowledged that counties need reliable revenue to deliver services. But that power must operate within constitutional limits.
For business owners, the value of this ruling is knowing what to ask before accepting a payment demand: show the legal authority, explain the basis of the charge and demonstrate that the process was lawful.
Source: High Court at Malindi, Constitutional Petition E011 of 2021, Krystaline Salt Company Ltd & 3 others v County Government of Kilifi & 2 others, judgment dated October 2, 2026. Key findings appear in paragraphs 47–50, 63–74 and 75–81. Read the full judgment.
