Former Senator Johnstone Muthama has challenged the government’s directive that mining companies pay one percent of their revenue to fund development projects.
Through his firm Rockland Kenya Limited, Muthama a gemstone dealer wants the court to suspend any further implementation of section 183 of the Mining Act 2016, the Mining of Royalties of Minerals Regulations 2013 and the Mining Community Development Agreement Regulations 2017 pending the hearing and determination of the case.
Muthama argues that the company already spends colossal amounts of money paying different expenditures and adding development to that is arbitrary.
He say Rockland is located within Tsavo National Park areas which means that they have to pay a fee to the Kenya Wildlife Services
“Since the issuance of the Lease we have been conducting our business and paying the Government annual rent as demanded by the Lease, royalties as demanded by the Mining act and statutory taxes,” the petition reads.
According to Rockland, there is no human settlement in a radius of 45 Kilometers from their mining operations.
Muthama says on March 11 2019 they received a letter from the Regional Mines Officer of Taita Taveta requesting them to appear at a meeting the next day for the purpose of formation of a community Development Agreement Committee.
They were informed that the Community Development Agreement mentioned in the letter was as a result of the introduction of the Mining Regulations 2017 which came into force on July 28 2017.
Muthama says that they objected to the provisions of the regulations that demanded that they pay 1% of their revenue to fund development projects.
“We did further proceed to write a the commission of Revenue Allocation at the KRA to voice our objection to the imposition of the 1% tax in view of the fact that we were already paying too much by way of tax and royalties”
In his view, the former legislator says the Mining regulations seek to have his company assume the duties of the National and County Government by them proving 1 % of its annual revenue to find development projects that are the duty and obligations of the National and thus the provision that the company provides a portion of its property to fund development projects is discriminatory against them.
“The money the state is asking from us is to be used to develop local infrastructure which is not our duty but belongs to the national and County Government,” Muthama says.
They argue that the directive id only directed to the company who are holders of the license but the said directive are not meant for other companies who are not holders of the License under the Mining act
They are expected to meet the obligations of funding development projects as specified in the regulations.
The provisions by the Ministry are arbitrary and unreasonable and are contrary to the principle of the proportional and the ethos of public participation.
