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The Kenya central government is infuriated by proposed local mining tax plans.

Local authorities along Kenya’s coast are determined to implement new taxes on mining and oil exploration activities within their jurisdictions, despite facing resistance from the central government. Kwale, Lamu, and Taita Taveta counties, situated along Kenya’s Indian Ocean coastline, have put forth proposals to impose these taxes on investors engaged in exploiting minerals, gas, and oil within their territories. The aim is to generate more revenue from resource exploitation to enhance local services and job creation.

Governor Salim Mvurya of Kwale County expressed the counties’ intentions, emphasizing the need for mining companies to contribute to the development of social and economic infrastructure within the regions. However, Kenya’s mining minister, Najib Balala, stressed that the taxation of the mining sector falls under the jurisdiction of the central government.

Balala has already presented a new mining bill to parliament, seeking to increase royalties to ensure the state receives a larger share of profits from the sector. Nevertheless, if the proposed bills by the local authorities are passed by their respective county assemblies, it will challenge Nairobi’s capacity to contest decisions made by local governments.

In Kwale County, the proposed bill entails an annual business permit levy for mining companies based on their workforce size. Additionally, there is a proposed levy for each tonne of sand containing titanium ore. Australia’s Base Resources, operating in Kwale, expressed concerns about the bill, highlighting the constitutional limitations on county administrations regarding mineral administration.

Moving north to Lamu County, authorities aim to introduce a new levy for land under exploration for oil and gas, with varying rates for Kenyan and foreign companies. However, companies like Australia’s Pancontinental Oil and Gas, involved in oil exploration in Lamu, were unavailable for immediate comment.

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