The Public Benefit Organisation Act (PBO) was enacted in 2013, however, there was a long wait for the commencement of the legislation. The way forward became clear when the then Cabinet Secretary for Interior and National Administration gazetted the 14th May 2024 date as the date of operationalization of the PBO Act.
The Act defines a Public Benefit Organization as a voluntary membership or non-membership grouping of individuals or organizations, which is autonomous, non-partisan, non-profit making and which is organized and operated locally, nationally or internationally, engages in public benefit activities and is registered as such by the Authority. Further, the Act establishes an administrative and regulatory framework for the establishment and operation of Public Benefit Organisations in Kenya.
Public benefit activities under the PBO Act include:-
- enhancing or promoting the economic, environmental, social or cultural development;
- protecting the environment; and
- lobbying or advocating on issues of general public interest or the interest or well-being of the general public or a category of individuals or organizations.
The PBO Act provides a number of benefits enjoyed by PBOs as compared to the NGOs which include:
- financing for PBOs from the government arising from partnerships through grants, budget subsidies and service contracts;
- Enjoying preferential treatment in bidding of contracts and instances of public procurement procedures;
- Exemptions from certain taxes such as income tax;
- when receiving donations or grants, members subscriptions; and
- on income derived from undertaking income producing activities wholly utilised for public benefit purposes established by a PBO.
- Customs duty on imported goods or services used to promote public benefit purposes
- Capacity building through trainings relevant to PBOs offered and carried out by government institutions.
It is key to note that the regulator in the repealed act of parliament was the Non-Governmental Organization Board, however, the regulator in the PBO Act is the Public Benefit Organization Regulatory Authority (PBORA) whose membership transition from the defunct NGO Board. The Authority assumes all the powers, duties, rights, liabilities functions of the NGO Board from the commencement date of the legislation.
The effect of the PBO Act means that all NGOs that are registered are also deemed to be registered under the PBO Act, however, the organizations will be required to re-register under the PBO Act within one (1) year from the Commencement Date. This position has created confusion as to whether already registered NGOs will need to pay the statutory fees on re-registration to PBOs. The PBO Authority is yet to clarify on this point. Moreover, NGOs that were exempt from registration under the NGO Act will be required to apply for registration under the PBO Act within three (3) months from the enactment date.
International Public Benefit Organizations (IPBOs) have been accommodated in the Act. An IPBO that wishes to operate in Kenya ought to apply to register as a PBO in Kenya and be issued with either:
- a certificate of registration – in the event they will be directly implementing programmes in Kenya;
- a permit to operate in Kenya – in case they will not be directly implementing any programmes in Kenya;
Furthermore, the IPOs need to provide the particulars of a local authorized agent who should be a Kenyan citizen resident who will be the IPBO’s duly authorised legal representative for purposes of receiving official summonses, notices and inquiries on the behalf of the IPBO.
Any new application under the PBO Act provides for a period sixty (60) days for consideration of a new application for registration. Where an application does not meet the Authority’s threshold and it fails to issue a certificate of registration with sixty days, an applicant may apply to the Public Benefits Organizations Disputes Tribunal for an order to require the Public Benefit Regulatory Authority to issue a certificate of registration or reasons for failure to register the applicant.
Any party aggrieved by a decision of the Tribunal may appeal to the High Court and the High Court’s decision shall be final.
The Tribunal determines appeals from members of the public or PBOs against decisions of the PBO Authority and complaints arising out of a breach of the PBO Act.
Finally, the PBO Act establishes the National Federation of Public Benefits Organisations which is an umbrella organisation of all registered PBOs that act as a self-regulation forum. Its functions includes promoting self regulation, coordinating and monitoring the self regulation forums registered under the PBO Act.
Every organization registered as a PBO is eligible for membership under the National Federation. Each organization registered under this Act may voluntarily join and maintain membership in a self-regulation forum.
This alert is for information purposes only and is provided for general purposes only and does not constitute legal advice. Should you have any questions or need legal advice, please contact us on info@jkkibicho.co.ke.
Contributor:
Joel Musomi -Principal Associate
