How 0.03 per cent new levy on State tenders issued will affect contractors, suppliers

By Phyllis MUCHOKI

Contractors and suppliers who land government tenders of Sh1 million will be required to pay Sh300 in a new arrangement which kicked off on September 1, 2024.

The new regulatory shift by the Public Procurement Regulatory Authority (PPRA) introduces a 0.03 per cent levy on the total value of signed contracts, excluding applicable taxes, meaning that even small suppliers may be affected by the new move.

“The Levy Order, 2023; provides that there shall be paid a Levy by a supplier on all procurement contracts signed between the supplier and a procuring entity, at the rate of zero point zero three per centum (0.03%) of the value of the signed contract, exclusive of applicable taxes,” reads the notice.

The directive will equally apply to contracts that are long term in nature (Term Contracts) where Local Service Orders (LSOs) or Local Purchase Orders (LPOs) are raised as and when orders are made.

The contractors and government suppliers will be required to remit the Levy amounts to the Authority through the eCitizen payment platform by the 20th day of the subsequent month.

The procurement agency says that failure to honour this will attract a penalty of 5 per cent of the outstanding levy amounts, which will apply for each and every month the levy amount remains unpaid.

“All procuring entities shall file monthly returns by the 20th day of the subsequent month on all levy amounts deducted and remitted to the Authority through the Public Procurement Information Portal,” said PPRA.