Brace for price increases as Kebs slaps companies with new levy
Business
By
Macharia Kamau
| Nov 05, 2025
Local manufacturers have been slapped with a new levy, which is expected to result in a rise in the cost of essential goods, further straining many households already grappling with reduced or stagnated incomes.
The standards levy, which the Kenya Bureau of Standards (Kebs) has set at 0.2 per cent on all locally manufactured goods, is the latest in a series of taxes and levies seen to be pushing up the cost of doing business in the country.
It further projects Kenya’s regulatory framework as unpredictable, a major concern for investors over the years.
READ MORE
Multinationals face new 15pc minimum tax in fresh crackdown
New taxes add to trade barriers within EAC, Comesa blocs
M-Pesa Foundation in Sh30b programme to boost skilling of teachers in ICT
Kenya among countries exposed to increased cyber-attacks
This woman Kibue: Kenya's first female professor of architecture
From Konyagi to onions: How Tanzania unrest puts Sh4.3b Kenya imports at risk
Why Kenya must embrace progressive taxation
Irony of State's borrowing binge amid increased private sector financing
Kebs in a public notice yesterday said the levy, which was gazetted in August this year, takes effect immediately.
The standards body also said it would, in the course of November and December, undertake awareness sessions for manufacturers and stakeholders to enable them to understand and comply with the new order.
“All manufacturers are required to remit to Kebs, standards levy, recoverable at source, at the rate of 0.2 per cent of their monthly turnover in respect of manufacture undertaken, net of VAT, Excise Duty and Discounts where applicable, subject to the maximum of Sh4 million per annum,” said Kebs in a statement.
“Manufacturers whose turnover of the goods manufactured or services offered in each month net of VAT, excise duty and discounts does not exceed Sh5 million per year are exempted from paying levy.”
“The order takes effect immediately following the gazettement.”
Kebs also requires manufacturers to declare their operations to Kebs through filling registration forms on its Kebs Information Management System (Kims); failure to which, the standards body said, is an offence.
It further noted that the non-disclosure “does not absolve a manufacturer from paying the standards levy and penalty as prescribed in 108(3) of the Standards Act, which is five per cent monthly for the period the levy remains unpaid.”
The new levy adds to numerous taxes that local industries have to contend with, which have been blamed for making local production costlier, giving importers an edge.
Kenya’s private sector has been calling for a predictable tax regime and noted that frequent adjustments in taxes and levies have been disruptive to businesses and households.
“To add yet another levy without consultation, clarity or regard for sector-specific realities is to further burden an industry that is already carrying more than its fair share,” said Clement Tulezi, chief executive Kenya Flower Council, in a recent article protesting the levy, which is also expected to directly affect flower exporters.
He also noted the “flawed interpretation of ‘value addition’” for the horticulture industry that falls within agriculture.
“This new charge – which is on gross sales, not profit – cuts directly into working capital, money that would otherwise be used to pay wages, invest in sustainability and expand market access.”
The National Treasury has been pursuing a stable tax environment and, in past budget documents, said it has developed the National Tax Policy, whose objective is to provide guidelines on taxation policy that supports economic development and diversification.