The Public Procurement Regulatory Authority (PPRA) has officially announced the implementation of the Public Procurement Capacity Building Levy Order, 2023, set to take effect on September 1, 2024. This new directive, established under Legal Notice No. 206 of 6th November 2023, introduces a levy designed to fund the capacity development of individuals involved in public procurement and asset disposal proceedings in Kenya.
Overview of the Levy Order
The Levy Order, 2023, was issued by the Cabinet Secretary for National Treasury and Economic Planning, John Mbadi, and mandates a levy of 0.03% on the value of all signed procurement contracts, exclusive of applicable taxes. This levy is specifically targeted at enhancing public procurement practices through mentoring, training, and technical assistance. The levy is part of a broader strategy to bolster the efficiency and integrity of public procurement and asset disposal processes, ensuring that individuals engaged in these activities are adequately equipped with the necessary skills and knowledge.
Key Provisions and Compliance Requirements
The PPRA has outlined critical details regarding the implementation and scope of the new levy:
- Commencement Date: The levy will be applicable to all procurement contracts signed from September 1, 2024. This includes any contract extensions, renewals, and variations that are signed on or after this date. The implementation date marks a significant shift in the public procurement landscape, as all stakeholders must adapt to the new financial and procedural requirements.
- Scope of the Levy: The Levy Order applies to long-term contracts where Local Service Orders (LSOs) or Local Purchase Orders (LPOs) are issued. This means that both new contracts and existing agreements that are extended or modified after the commencement date will be subject to the levy. It is crucial for all parties involved in public procurement to review their contracts to ensure compliance with the new regulations.
- Payment Deadlines and Penalties: Procuring entities are required to remit the levy amounts through the eCitizen payment platform by the 20th day of the month following the signing of contracts. For example, if a contract is signed in September, the levy must be paid by October 20th. A penalty of 5% will be imposed on any outstanding levy amounts not paid by the stipulated deadline, highlighting the importance of timely compliance.
- Monthly Returns: All procuring entities must file monthly returns on levy amounts deducted and remitted through the Public Procurement Information Portal (tenders.go.ke). This requirement ensures transparency and accountability in the collection and use of the levy funds. The PPRA will monitor these returns closely to enforce compliance and address any discrepancies.
Stakeholder Engagement and Support
To facilitate a smooth transition to the new levy system, the PPRA will conduct stakeholder sensitization forums starting in September 2024. These forums will provide an opportunity for procuring entities, suppliers, contractors, consultants, and other participants in the public procurement and asset disposal system to gain a clear understanding of the new requirements. Continuous engagement will be maintained to address any concerns and promote adherence to the provisions of the Levy Order.
The PPRA emphasizes the importance of compliance with the new levy requirements to support the capacity development of individuals involved in public procurement. By investing in training, mentoring, and technical assistance, the Authority aims to strengthen procurement practices across the public sector, ultimately leading to more efficient and effective service delivery.
Seeking Further Information
Stakeholders seeking further information or clarifications on the Public Procurement Capacity Building Levy Order are encouraged to contact the PPRA directly via email at info@ppra.go.ke. The PPRA remains committed to providing the necessary guidance and support to ensure that all parties comply with the new levy requirements and contribute to the continuous improvement of public procurement practices in Kenya.
As the September 1, 2024, implementation date approaches, it is essential for all stakeholders to familiarize themselves with the new levy provisions and take the necessary steps to comply. The introduction of the levy marks a significant development in Kenya’s public procurement landscape, aimed at enhancing the skills and capacity of those involved in the sector.
