Nairobi, March 15 -- The Treasury has introduced a new levy on contractors making supplies to both national and county governments, a shift likely to raise the cost of public procurement.

New regulations published by Treasury Cabinet Secretary Njuguna Ndung' u show a tax known as capacity building levy would be charged at 0.03 percent of the total value of supplies to State agencies.

"There shall be paid a levy by a supplier on all procurement contracts signed between the supplier and a procuring entity, at the rate of zero point zero three percentum (0.03percent) of the value of the signed contract, exclusive of applicable taxes," the regulations say.

This means that a contractor in a project valued at Sh1 billion will be levied at Sh...