, NAIROBI, Kenya, Feb 4 – All suppliers of building materials for the Sh366billion Standard Gauge Railways (SGR) project must be registered with the Kenya Revenue Authority’s (KRA) iTax system before being fully accepted on board.
KRA Commissioner General John Njiraini says the online tax system registration is aimed helping the authority to monitor and ensure that the suppliers adhere to all the governing accountability rules set by the authority.
“We will use our iTax electronic declaration system to track information on SGR supplies for statistical and other purposes. For this reason we have as a policy determined that all SGR suppliers must be registered as iTax users prior to being fully accepted,” Njiraini stated.
He was speaking on Wednesday during a sensitisation workshop to the suppliers of the project, which held at the KRA office in Nairobi.
The government has already identified 124 prequalified suppliers in the initial batch with the list expected to be updated.
KRA has also directed the contractor, China Road and Bridge Corporation, to ensure that no materials meant for the Standard Gauge Railway find their way in the hands of the public.
This is because most of the materials are likely to cost less compared to the market price due tax exemptions.
“I should point out that any instances of detected, involving the offloading of SGR supplies into the open market shall attract sanctions as provided by law,” Njiraini warned.
KRA and the National Treasury have come up with a framework through which the government will be able to pay for all the VAT and other levies on all the construction materials for the project.
The arrangement is aimed at ensuring smooth implementation of the project by working within the legal confines while at the same time removing the risk of non-compliance with VAT requirements from SGR supplies.
“The suppliers will be charging VAT to the contractor, but the contractor will not be making payment of that VAT. That is where the National Treasury comes in and make that payment to the suppliers, hence the need to come up with that framework on how this will be implemented smoothly,” Commissioner Domestic Taxes at KRA, Pancrasius Nyagah, explained.
The first phase of the project which has already kicked off will cover 609.3 kilometres from the port of Mombasa to Nairobi.