Nairobi — Kajiado county government has been losing revenue amounting to millions over uncollected land rates and royalties from Tata Chemicals Magadi Limited.
The company has been embroiled in a legal tussle with the county government over unpaid rates amounting to close to Sh14 billion.
According to the Auditor General’s report, in the financial year 2019/2020 alone, the county government had lost Sh10.6 million in revenue as the international firm had refused to pay the land rates contesting the rates in the County Finance Act (2016)
“The High Court ruled the law was procedurally passed and the county government has legal mandate, they now went to the court of appeal. We know they will lose because the current land rate is what everybody is paying,” said Kajiado Governor Joseph ole Lenku told Senate Public Accounts Committee.
Tata Chemical is accused of contravening local laws by failing to pay revenue to the county government according to the finance act.
The company is disputing the increased land rates from the initial Sh 2000 per acre to Sh10,000 per acre.
The Chair of the committee Ochillo Ayacko questioned why Kajiado county government and Tata Chemicals Magadi limited have failed to work on an amicable solution years after the tussle between the two emanated.
“This is a big issue; we can listen to it and make our recommendations. Just out of curiosity on the undisputed rate. Why can’t they pay what is not being disputed?” he questioned.
The county government has decried that Tata Chemicals has refused to pay the land rates to despite the court issuing orders directing the same.
“Magadi is not willing to pay even on the amount of acreage that the court agreed they need to pay. We had a meeting with them and taking the consideration on the acreage they have and we agreed they should go back and pay Sh 2000 but they have refused to pay ,” Lenku said.
Lenku narrated that the international firm has been subjecting the county government to historical injustice for failing to pay the land rates for years now.
He said the county is losing a lot of revenue as Tata chemicals sit on a acreage of land which is almost the size of a single ward.
“The history of Magadi soda neighbors historical injustice as time goes the figure in terms of pending rates will amount to billions,”Lenku said.
In a case filed at High Court in Kajiado, Tata Chemicals Magadi Ltd wanted the County’s Finance Act declared null and void saying it was enacted unprocedurally.
The company wanted the court to grant permanent injunction restraining the county government from ever demanding land rates arrears for the period in contention from 2013 to 2018.
The company opined that the that the county government’s should await the expiry of its lease in 2053, for them to negotiate new terms of the land lease.
The defaulted land rates date back to 2013 and accrue from the company’s 224,991 acres, where it operates and extracts soda ash in Magadi, Kajiado West.