KEBS Proposes Introduction of New Tax Targeting Manufacturers

KEBS Proposes Introduction of New Tax Targeting Manufacturers

In a controversial move that could shake up Kenya’s manufacturing sector, the Kenya Bureau of Standards (KEBS) has proposed a new tax targeting manufacturers and service providers.

Dubbed the Standards (Standards Levy) Order 2025, the proposal suggests a 0.2% monthly levy on the customs value of goods or services, excluding VAT, excise duty, or discounts.

The proposal was presented before Parliament on Tuesday, August 5, by Industry Principal Secretary Juma Mukhwana, who represented Trade Cabinet Secretary Lee Kinyanjui, alongside KEBS CEO Esther Ngari.

KSh4M Levy Cap Draws Sharp Criticism

The National Assembly’s Committee on Delegated Legislation raised serious concerns over the legality, fairness, and timing of the proposed tax.

“The committee reviewed the proposed levy and questioned whether it fairly targets manufacturers of all sizes,” read a statement from Parliament.

The committee zeroed in on the KSh4 million annual levy cap, noting the sharp disparity it creates. They highlighted that large-scale companies producing goods worth over KSh2 billion would pay the same amount as smaller firms—an imbalance likely to cripple Micro, Small, and Medium Enterprises (MSMEs).

“This Will Hurt Small Manufacturers” – MPs Warn

Members of the committee urged the ministry to design a more progressive and proportional tax system to ensure equity across the board.

“The maximum levy limit of KSh4 million is not fair,” one MP argued. “By 2030, this figure is expected to hit KSh6 million, which will increase the burden.”

Despite the storm of criticism, PS Mukhwana attempted to reassure lawmakers and the public.

“Most manufacturers in Kenya fall under the MSME category and earn below KSh5 million annually,” he said. “They will be exempt from the levy.”

KEBS Stands to Double Revenue If Law Passes

The ministry projects that the levy could double KEBS’ revenue from the current KSh700 million to KSh1.4 billion annually. Officials insist this boost will strengthen quality control and enhance regulatory enforcement

Still, MPs remain divided, with some arguing the law will “discourage local production” during an already strained economic period.

The proposal now awaits further review before any legal implementation.

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KEBS Proposes Introduction of New Tax Targeting Manufacturers