Govt Gives Businesses Five-Day Deadline to Comply with Procurement Levy Rules
The Public Procurement Regulatory Authority (PPRA) has issued a fresh notice to all public procuring entities across Kenya, urging them to remit the Capacity Building Levy (CBL) before the current financial year comes to an end.
In the latest communication, the authority reminded government institutions that the deadline for compliance is fast approaching and warned that failure to submit the levy on time will result in financial penalties.
PPRA stressed that institutions should act immediately to avoid unnecessary costs that could increase over time.
According to the authority, any procuring entity that fails to remit the Capacity Building Levy within the required timeline will automatically attract a penalty of five per cent every month on the outstanding amount.
The penalty will continue accumulating every month until the full balance is paid, meaning institutions that delay payment could end up paying significantly more than the original amount owed.
PPRA explained that these penalties are designed to encourage timely compliance with procurement regulations and ensure that public institutions meet their legal financial obligations.
The authority noted that delaying payments not only increases financial costs but may also expose institutions to additional compliance challenges.
The reminder comes as the 2025/2026 financial year draws to a close, a period when ministries, state departments, county governments, state corporations, and other public institutions are expected to finalise their budgets, settle pending obligations, and complete all required financial reporting.
Over the past few years, PPRA has stepped up efforts to strengthen accountability and improve compliance across Kenya’s public procurement system.
The authority has been implementing reforms aimed at promoting greater transparency, improving efficiency, and ensuring prudent management of public resources.
The Capacity Building Levy is an important source of funding for training and professional development within Kenya’s public procurement sector.
The funds collected support capacity-building programmes that equip procurement officers with the knowledge and skills needed to effectively manage public procurement processes while ensuring compliance with the law.
By investing in training and professional development, the levy helps improve service delivery, strengthens procurement systems, and promotes better use of taxpayers’ money.
PPRA believes that continuous capacity building is essential in maintaining high standards of professionalism and integrity across public institutions.
The latest directive places pressure on all procuring entities to clear any outstanding levy payments within the stipulated period.
Institutions that fail to comply risk not only accumulating monthly penalties but also facing possible compliance issues that could affect their financial records and procurement operations.
PPRA further emphasised that the five per cent monthly penalty will be applied automatically on any unpaid balance, with the charges continuing to accumulate until the full amount has been settled.
This means that the longer an institution delays payment, the higher the financial burden it will face.
The authority has therefore urged all ministries, county governments, state corporations, public agencies, and other procuring entities to ensure they comply with the payment requirements before the financial year closes.
Timely remittance of the Capacity Building Levy, PPRA said, will help institutions avoid costly penalties while ensuring full compliance with Kenya’s public procurement laws and regulations.
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