Why real estate agents should not pay single Business Permit to County governments

A ruling by the High Court stopped the charging of single business permit fees on certain professions that includes Real Estate agents registered under the Estate Agents CAP.533. This is because charging such fees would amount to double taxation.

Since 2010, there are two layers of Government, National and County Government. The National Government does have its own mandates and levies taxes on some functions. However, some functions are levied by the County Government in areas where the services fall within the County and where there are no similar taxes levied by the National Government. Once the National Government levies a particular tax, the same cannot be levied by the County Government.

In Constitutional Petition No. 97 of 2016, The Kenya Pharmaceutical Association and Pharmaceutical Society of Kenya sought the Court’s intervention to prohibit County Governments from demanding, seeking or receiving applications for Single Business Permits or fees for such application or permit or license or otherwise from its members. The Judge explained the crucial difference between trade license fees and practicing license fees stating that the County Government is prohibited from issuance of Regulatory Licenses. The trade licensing fee is paid for trading in the County. The Judge further reiterated that the function of the County Government is trade development and regulation which excludes the regulation of professions which render services only.

In the Fourth Schedule to the Constitution, among the services devolved to the County Government is Trade Development and Regulation which includes:

(a)……

(b) Trade licensing (excluding regulation of professionals).

The County Government is therefore prohibited from issuing regulatory licenses for professionals under which real estate agents falls under.

To take advantage of this regulation, you must be registered with The Estate Agents Registration Board.

Read the blog below on how to register as a real estate agent and the process of registering as a real estate agent in Kenya.

How to register with Estate Agents Registration Board as a real estate agent in Kenya

What other professionals do not pay single business permits?

Blacks’ Law Dictionary 10th Edition at page 1903 defines profession as ‘A vocation requiring advanced education and training especially one of the three traditional learned professions – Law, Medicine and the Ministry.”

Concise Oxford English Dictionary 12th Edition defines profession as â€˜paid occupation, especially one involving training and a formal qualification.”]

So registered professionals like accountants, surveyors, medical practitioners, engineers, accountants and lawyers may rely on court judgements not to pay the single business permit fees.

Some cases to rely on are:

·       High Court of Kenya at Nyahururu J.R.NO.8 OF 2017

·       High Court in Nakuru Review 14 or 2014.

·       Constitutional Petition No. 97 of 2016

·       Civil Application No. Nai 2 Of 2000

Do Pharmacies need to pay for single business permits?

Every pharmacy needs to pay for single business permits.

This was determined by J. Mativo in Petition 97/2016, the Kenya Pharmaceutical Association of Kenya Vs Nairobi County Government and 46 others County Governments. The court held that they are liable to pay trade licenses because they also sell pharmaceutical goods. The court said:

“Pharmacy is a profession but to the extent that it also involves selling of pharmaceutical products. It is a trade as opposed to a profession such as law or Architecture which render services only. By being asked to pay trade licenses, for their business premises, the County Government cannot in any manner be said to be regulating or controlling the profession.”

Let us know anything we may have missed on the comment section below.