Manufacturers Raise Alarm Over New KEBS Standards Levy as Financial Burden Surges Tenfold

Kenyan manufacturers have raised concerns over the implementation of the Standards (Standards Levy) Order, 2025, warning that the revised framework could significantly increase the cost of doing business and weaken the competitiveness of local industries.

The new Order, gazetted by the Kenya Bureau of Standards (KEBS) under Legal Notice No. 136 on 8 August 2025, requires manufacturers to remit 0.2 percent of their monthly turnover, exclusive of VAT and discounts. While the levy rate remains unchanged, the 2025 Order introduces major revisions to the maximum payable limits and exemptions, dramatically increasing the financial obligations for manufacturers.

Under the new framework, the maximum annual levy is capped at KSh4 million for the first five years, after which it will rise to KSh6 million per year. This represents a sharp increase from the previous KSh400,000 annual cap established under the 1990 Order—effectively a tenfold rise in the levy ceiling.

At the maximum level, manufacturers could pay up to approximately KSh11,000 per day during the first five years, rising to about KSh16,000 per day thereafter, inclusive of weekends and public holidays.

Industry stakeholders say the escalation could place an unprecedented financial burden on the country’s productive sector. While acknowledging the importance of government revenue for national development, manufacturers warn that abrupt and disproportionate fiscal measures could threaten business continuity, employment, and investment.

Businesses argue that additional regulatory costs are likely to be passed on to consumers, further straining households and potentially placing Kenyan enterprises at a competitive disadvantage in both local and regional markets.

Manufacturers have also raised concerns that imports are not subjected to the Standards Levy, making the charge unique to Kenya and absent in other East African Community (EAC) member states. They warn that the disparity could undermine the competitiveness of Kenyan manufacturers and encourage investors to shift operations to neighbouring economies.

Further controversy surrounds the classification of naturally grown commodities such as flowers as manufactured goods, which industry players say amounts to a misclassification. Flower growers, they note, already pay mandatory inspection, certification, and licensing fees to multiple government agencies, and the levy could therefore amount to double taxation.

Similar concerns have been raised by companies in mining and quarrying, which operate under multiple regulatory regimes and already pay several statutory levies and compliance charges.

Manufacturers also argue that the levy does not necessarily correspond with improved service delivery, noting that companies already incur significant costs for KEBS services such as standard marks, inspections, testing, and certification, often amounting to millions of shillings annually.

The dispute over the levy has now moved to court. The matter is currently before the High Court, with a hearing scheduled for 13 April 2026.

Even as the legal process continues, industry stakeholders are calling for the immediate suspension of the Standards Levy Order, 2025 and a return to stakeholder consultations. They are also pushing for an independent review of KEBS’s financing framework, greater transparency in the use of funds, and the creation of a joint public–private working group involving regulators, the Ministry of Investments, Trade and Industry (MITI), and representatives of the business community.

Industry players further propose exemptions for sectors not directly regulated by KEBS, including horticulture, pharmaceuticals, and firms operating under special investment schemes such as Export Processing Zones.

Stakeholders say the reforms are necessary to ensure the levy aligns with global trade facilitation principles and does not become a revenue-generation tool at the expense of Kenya’s manufacturing competitiveness and broader economic recovery.

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