Tax Revolts Through Judicial Process and Its Fiscal Impact on Local Government: the Case of Karen- Langata District Association and the City Council of Nairobi

Abstract

Tax revolts in Kenya have mainly been through the judicial process. Members of the public who are increasingly aware of their rights have on several occasions headed to court to demand that public institutions should not receive or raise taxes without fulfilling their mandate. One of the most organized cases of judicially aided tax revolt in Kenya was the case pitting Karen Langata residents under the umbrella of Karen Langata District Association against City Council of Nairobi in which the court barred the City Council from collection of property rates from residents of the Karen- Langata area. The residents had complained of poor service delivery by the council. Although judicially aided tax revolts are now a common phenomenon in Kenya, little research had been done on the effect of judicial aided tax revolts on public administration in Kenya. Much of the research into the effects of tax revolts have generally been in developed countries. This study therefore sought to bridge the existing knowledge gap by investigating the impact of the Karen Langata case on fiscal decision making at City Council of Nairobi. The study adopted a descriptive design which enabled the study to answer the questions of the status of the subject under study. The target population were the managerial staff at CCN and the officials and office bearers at KLDA. Snow ball sampling and purposive sampling techniques were used to select the respondents. Qualitative data was gathered using interviews with both officials of CCN and KLDA. Responses gathered were analysed by way of content analysis. Quantitative date was gathered from the available financial records from CCN. Time series analysis was done to ascertain the change in revenue collection in the period after the court ruling. The study concluded that following the court ruling, there had been no significant dip in revenue collection at CCN as the council had introduced other sources of revenue. The study recommended that the CCN complies with the court order to enable it receive the property rate monies currently held by KLDA to be used towards enhancing service delivery to members of the public.