Construction levies that were set aside in 2017 are now set to return if the Cabinet gives the nod. This follows a decision by a Cabinet sub-committee to approve reinstatement of the charges, setting the stage for the return of the environmental audit fee that is as high as Sh40 million.
The fee had been scrapped to ease the burden of investors seeking to venture into real estate and fast-track procedures to start such businesses. At the time, the Cabinet said construction levies charged by State agencies and county governments have been a barrier to investments.
Contractors 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 pay a levy of 0.5 per cent of the value of the contract before they can start work to the National Construction Authority (NCA).
In 2014, the Mining ministry started collecting a two per cent royalty on construction materials — increasing the cost of quarry stones, concrete blocks, hardcore, ballast and sand. This is on top of the county approval fee, which is levied based on the size and cost of a home. – BD
