Boon for developers as government scraps construction levies

The government has moved scrap all duties and levies charged by state agencies and county governments on construction projects in a bid to spur development.

The move is expected to eradicate the multiple charges paid by developers seeking to put up either residential or commercial properties.

A brief from a Cabinet meeting chaired by President Uhuru Kenyatta indicates that the multiple charges levied by various ministries, departments, agencies and county governments for the construction industry had contributed to the increase of costs in the sector.

This also led to the unwarranted delays in obtaining requisite approvals.

“Cabinet has eliminated duplication of roles with a view to ensuring that government ministries and departments perform their core mandate. Overlapping services will now be performed by the ministry, department or agency best suited to offer the requisite service,” a brief from cabinet reads

In June during the presentation of the 2016/2017 budget, Treasury Cabinet Secretary Henry Rotich scrapped charges levied by the National Construction Authority and the National Environment Management Authority.

However months after the budget was approved, the scrapping of the levies is yet to be gazzetted.

Developers paid 0.5 percent of the value of a building above Sh5 million to the NCA, while NEMA charged Sh10,000 or 0.1 percent of the project value for an environmental impact assessment.

County governments have also been charging variable fees for projects to be approved.

Developers had raised concern that the numerous steps in seeking approvals delayed projects with some abandoning their plans due to prolonged delays.

Relevant ministries are now expected to amend affected legislation and regulations to actualize the move.