TAXES & REAL PROPERTY IN KENYA | Part 3: Consultancy Fees/Costs

A consultant (from the Latin consultare means “to discuss” from which we also derive words such as consul and counsel) is a professional who provides advice in a particular area of expertise such as project management, Architecture, the environment,  tax law, economics,  engineering etc

The Online Etymology Dictionary defines a Consultant as “one qualified to give professional advice

A consultant is usually an expert or a professional in a specific field and has a wide knowledge of the subject matter. A consultant usually works for a consultancy firm or is self-employed, and engages with multiple and changing clients. Thus, clients have access to deeper levels of expertise than would be feasible for them to retain in-house, and may purchase only as much service from the outside consultant as desired.

Developers have to meet the cost of Consultants whom he consults in packaging his project.

Various professions are governed by various Acts of Parliament or Prescribed Professional Fees. However, it is worthwhile to note that those provisions are only for the chargeable minimum and may be revised upwards from time to time by the Consultant.

  • 16% VAT on consultancy Fees- Value Added Tax- levied on the value added to goods and services at various stages before they reach the consumer
  • Approval Fees (Local Authority)- Kshs. 840 for 46sm – Kshs.7,980 for 930sm. Fees levied to protect the public interest in the construction by guaranteeing that certain mminimum standards are met by all developers
  • Nema Fees as per EMCA Act of 1999
  • This requires an EIA report and 3 Public hearings
  • The cost is 0.1% of Project Cost in Fees
  • There is also the cost of Public Advertisement of the development project.
  • There is also an ensuing 60 day inspection period necessitated by the EMCA Act of 1999
  • Consultancy Fees for the various Professionals

It is worthwhile to note that:

” The National Environment Management Authority (NEMA) is established under the Environmental Management and Coordination Act (EMCA) No. 8 of 1999, as the principal instrument of government in the implementation of all policies relating to the environment”

The Other Parts of the Series are

Part 1 | An Overview

Part 2 | Land Transaction Costs

Part 4 | Construction Costs/Taxes

Part 5 | Ownership Costs

Part 6 | Economic Impact of Taxes & Proposed Solutions

@UjenziBora

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~ by ujenzibora on July 23, 2010.

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