Price of salt to go up after Supreme Court dismisses tax case
Business
By
Kamau Muthoni
| Aug 09, 2024
Kenyans might have to pay more for salt after the Supreme Court struck out a case filed by a manufacturer in a tax battle.
Supreme Court Judges Philomena Mwilu, Mohammed Ibrahim, Smokin Wanjala, and Isaac Lenaola unanimously found the court had no powers to hear the case filed by Krystalline Limited.
The manufacturer moved to the Supreme Court after it was ordered by the Court of Appeal to pay Sh185 million for almost 10 years it mined salt without paying Water Resources Management Authority (WARMA) charges.
Court of Appeal Judges Daniel Musinga, Hellen Omondi, and Ngenye Macharia affirmed a judgment by Environment and Lands Court Judge Kossy Bor that salt companies should pay for the seawater used while extracting salt.
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In its case, the company argued that the amount it was ordered to pay would cripple its operations.
In response, WARMA pushed the court to order Krystalline to deposit Sh100 million as security.
Krystalline CEO Hasmita Patel argued the company would be forced to close its operations and sell its assets to pay the amount. but WARMA said the amount demanded was negligible as Krystalline made billions from the salt business.
The water agency said that there was nothing in the case that involved constitutional interpretation. Supreme Court agreed.
"We hold that this court lacks jurisdiction to entertain the petition of appeal and the attendant application for stay of execution, dated March 11 and filed on March 15, 2024," the bench, headed by the Deputy Chief Justice, ruled.
On average, the cost of a kilogramme of salt is Sh25, and the smallest packet, 250 grammes, costs Sh5. It is the only household-use commodity that has experienced a zero per cent cost rise over the years, but now manufacturers will pass the charges to the end consumer.
Krystalline Salt Limited put up a spirited fight, just like Kensalt, which was facing a Sh270 million demand.
Justice Bor dismissed Krystalline's argument that water is God-given hence, the authority had no power to claim the money and decreed that the Constitution places management of all natural resources in the hands of the government.
"The Constitution enjoins the State to utilise the environment and natural resources for the benefit of the people of Kenya. This is the basis of charges imposed by the State on water use and other resources," Justice Bor ruled.
WARMA was demanding Krystalline charges spanning 10 years, between 2007 and 2017.
Each year, the State corporation demanded an interest of Sh185,000.
Kensalt was first to approach High Judge Oscar Angote, hoping it would get the much-needed reprieve, but the scales of justice fell to WARMA's side.
The judge struck out the case before it went to trial.