New KRA Proposal Tipped to Raise Building Costs
By Estate Cloud - over 2 years ago - Kenya
The Kenya Revenue Authority (KRA) is set to upset building costs as it turns its tax collection efforts on building transporters.
In a new proposal, the taxman wants to regulate the transportation of building materials by pooling building material transporters into groups for more efficient revenue collection.
The impending move has jolted building material transporters, some of whom have claimed the move would ultimately result in cost increases. “KRA might think they are going to streamline the revenue collection but the introduction of these regulations will add the cost of transport for our customers,” said James Mbuthia, a transporter from Gikomba told the Star.
According to the transporter, the new structure will see cross-county transporters paying every time they move materials out of Nairobi, creating instances of double payments due to the nature of the business.
“In a day I might just pay the county KSh. 250 to be able to transport, and if on a certain day I am not transporting materials in Nairobi I don't have to pay anything,” he said. The transporters say they will have no option but to transfer the cost to their clients in effect raising building costs, which results in higher house prices upstream.
Other transporters with activities limited to Nairobi, however, said the move would help them navigate daily trips more efficiently since the payments will be made monthly. The new plan also requires all transporters to register their vehicles under SACCOs or with transportation firms.
Every vehicle will be charged a monthly payable flat rate based on tonnage as defined in the Nairobi City County Finance Act 2013 to cater for all the trips to be undertaken in the month.
KRA’s Deputy Commissioner at the County Revenue Division, Annastaciah Githuba, said the taxman has set up a consultative meeting with stakeholders in the industry on February 4th 2021, to determine the implementation of the proposals.