The ambiguity around Treasury secretary Henry Rotich’s pronouncement abolishing levies payable by contractors for environmental audit and construction inspection is causing unnecessary anxiety among investors.
Building contractors continue to pay between Sh10,000 and 0.1 per cent of project cost (whichever is higher) as the National Environment Management Authority (Nema) assessment fee.
Developers whose projects exceed Sh5 million are also expected to continue paying a levy of 0.5 per cent of the value of the contract to the National Construction Authority (NCA) before they can start work. Yet that should not be the case at all. These levies introduced in 2013 have piled unnecessary cost pressure on the industry players.
Mr Rotich suspended the charges in his June Budget Speech. Apparently that appears to have been just meant to placate the restless industry. That Mr Rotich failed to give his proposal a legal effect in the Finance Bill 2016 betrays the level of insincerity on the part of the government.
An attempt by the Treasury to shift the blame to the Environment and Land ministries does not help matters, because other Bills that were meant to accompany the Budget were duly delivered.
The Treasury approved the 2016/17 Nema budget that seeks to raise Sh800 million from the said levy, yet that should not have been the case if it really intended to scrap the charges. The government must scrap Nema and NCA levies at the earliest opportunity.