Government agencies that fail to remit the Public Procurement Capacity Building Levy face a 5 per cent penalty on the outstanding amount for each month it remains unpaid, the Public Procurement Regulatory Authority (PPRA) has warned.
In a notice dated Thursday, October 22, the Authority directed all procuring entities to remit the levy on time as the financial year draws to a close, warning that penalties would continue to accumulate until the outstanding amounts are fully paid.
"As the financial year comes to a close, the Public Procurement Regulatory Authority (PPRA) reminds all Procuring Entities to ensure timely remittance of the Capacity Building Levy," PPRA stated.
“Failure to remit the Capacity Building Levy attracts a penalty of 5 per cent per month on the unpaid amount. Penalties will continue to accrue until full payment is made."
Two people attending a Public Procurement Regulatory Authority (PPRA) event in Kenya.
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PPRA
The Capacity Building Levy is money collected from public procurement contracts to fund training and improve skills among government procurement officers.
The levy is charged at 0.03 per cent of a signed public procurement contract’s value, excluding taxes, and deducted from payments made to contractors or suppliers.
Although suppliers pay the levy, procuring entities are required to deduct it from payments made to contractors and suppliers and forward the money to the regulator.
The government introduced the levy through the Public Procurement Capacity Building Levy Order, 2023, but the collection officially began on September 1, 2024.
For contracts that run for several years, the levy is deducted in parts as the government makes payments to contractors, but contracts that are fully funded by development partners are exempt from the levy.
Procuring entities must remit the deducted amounts to PPRA through the eCitizen payment platform by the 20th day of the month following the deduction.
They are also required to submit monthly returns through the Public Procurement Information Portal, detailing the amounts deducted and remitted.
The levy applies to a wide range of public institutions, including national and county government departments, state corporations, the Judiciary, public universities, public schools and colleges.
It also covers qualifying publicly owned companies, public pension funds and other entities that fall within the legal definition of a public entity.
Public Procurement Regulatory Authority (PPRA) forum.
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PPRA