The public procurement watchdog is pursuing 221 constituency offices, three counties, and a number of State agencies for failing to deduct a new levy when paying suppliers and contractors.
The offices are being pursued for breaching the law, which requires them to deduct 0.03 percent of payments to contractors and suppliers, as the Public Procurement Capacity Building Levy.
The levy came into force in September 2024 and is meant to be remitted to the Public Procurement Regulatory Authority (PPRA) to facilitate training and other capacity-building initiatives for procurement officers.
The PPRA on Monday said while compliance among State departments has been commendable, more than three-quarters of National Government Constituency Development Fund (NG-CDF) offices had not remitted the levy.
“The non-compliance by procuring entities is widespread within various procuring entity categories. For example, of the 290 NG-CDF committees, only 69 are compliant, three devolved units remain non-compliant as of today, February 2, 2026,” PPRA told the Business Daily.
The authority says it has written to non-compliant entities reminding them to remit levy deductions they are withholding, as it engages those that are yet to understand its role.
The PPRA is also seeking to find out the reasons the public entities have failed to remit the collections, or deduct from contractors’ money when paying for supplies and services.
“To enhance the collection of the levy, the authority has deployed several measures, including sending reminder letters to non-compliant entities reminding them to remit any withheld levy,” PPRA director-general Patrick Wanjuki said.
The National Treasury introduced the Public Procurement Capacity Building Levy in 2023, but started charging contractors and suppliers in September 2024.
Under the levy, contractors have their payments deducted by 0.03 percent, and procuring entities remit the same to PPRA.
“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 0.03 percent of the value of the signed contract, exclusive of applicable taxes,” states the Public Procurement Capacity Building Levy Order, 2023.
Following gazettement of the levy order, PPRA said the levy would apply to all signed contracts resulting from all procurements initiated from September 1, 2024, and contracts extended, renewed, or varied that would affect the original contract amount from July 2024.
“Procuring entities shall remit the Levy amounts to the PPRA through the eCitizen payment platform by the 20th day of the subsequent month; failure to do so shall result in a penalty of 5 percent of the outstanding levy amounts, which shall apply for every month the levy amount remains unpaid,” the PPRA added.
During the fiscal year ending June 2025, public entities were supposed to remit the levy covering payments made from September 2025.
The PPRA, however, notes that some entities remain non-compliant, despite continuing to award tenders and pay contractors, thus operating in breach of the law.
During audits for the year ending June 2025, Auditor-General Nancy Gathungu flagged four public universities for failing to remit the levy, despite paying hundreds of millions of shillings to contractors.
Ms Gathungu said Garissa University, Turkana University College, Meru University, and Chuka University breached the law by failing to remit the levy to PPRA.
“During the year under review, the university spent Sh307,363,656 on the acquisition of goods, works, and services. It was, however, noted that the Management did not deduct and remit the capacity building levy to PPRA as required by Public Procurement Capacity Building Levy Order, 2023,” Ms Gathungu said about Garissa University.
The PPRA says it has been engaging non-compliant entities through meetings, webinars, and in writing to understand their challenges in complying with the law, admitting that it has faced challenges getting the collections.
