MPs have faulted President Uhuru Kenyatta’s directive that banned collection of environmental levies, saying it has imposed a big burden on taxpayers.
The National Assembly’s Environment and Natural Resources committee said the ban on collection of Environmental Impact Assessment (EIA) fees had derailed the National Environment Management Authority (Nema) from the path of financial sustainability.
“The committee noted that the Nema was on the path of financial sustainability before the ban on collection of EIA fees, which had been projected that the authority would have been collecting Sh1.38 billion by 2020,” the committee, chaired by Maara MP Kareke Mbiuki said in a brief to the Budget and Appropriations Committee.
The latter committee was scrutinising the Budget Policy Statement and the Debt Management Strategy for 2018/19 and the Medium Term, which was approved by Parliament two weeks ago.
The Cabinet in 2016 scrapped all construction levies charged by State agencies and county governments in an effort to lower project costs.
The government said charges by agencies such as the Nema and the National Construction Authority (NCA) have been a barrier to investments. Before the imposition of the ban, contractors used to pay environmental audits of between Sh10,000 and Sh40 million depending on the risk levels of their projects.
Developers whose projects exceed Sh5 million also paid a levy of 0.5 per cent of the value of the contract to the NCA before they could start work.
“The ban on EIA fees…had created a great burden on tax payers,” Mr Mbiuki said in the committee report to the Budget committee.
A similar warning was issued by the same committee during the 11th Parliament.
The then chairperson Amina Abdalla warned that the decision by the Kenya Private Sector Alliance (Kepsa) to lobby President Kenyatta to stop Nema and NCA charges would affect the operations of the agencies.
“I feel that the reduction of fees and levies charged by Nema, the NCA and other institutions will be to ask the government to subsidise the private sector cost of doing business,” said Ms Abdalla at a Speakers roundtable meeting organised by the private sector in Mombasa.
“This will mean that the Treasury will be asked to fund Nema and NCA activities from the exchequer.”
The Treasury has since 2016 scrapped the levies charged by Nema and NCA in a plan expected to ease the burden of investors seeking to venture into real estate and fast-track procedures to start such businesses.
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