A New Financial Burden for Manufacturers

The Kenya Bureau of Standards (KEBS) has commenced the implementation of a new standards levy on all manufacturers, a move expected to trigger a wave of price increases for essential goods across the country. According to a public notice issued on Tuesday, November 4, 2025, all manufacturers are now required to remit 0.2% of their monthly turnover, a figure calculated after deducting Value Added Tax (VAT), excise duty, and applicable discounts. The regulation, officially titled the Standards (Standards Levy) Order 2025, was gazetted under Legal Notice No. 136 on August 8, 2025, and takes effect immediately.

The levy is capped at a maximum of KSh 4 million per annum for any single manufacturer. However, the order provides a cushion for small and emerging businesses, exempting manufacturers whose annual turnover does not exceed KSh 5 million. All payments are to be processed through the Kenya Revenue Authority (KRA) iTax platform and must be remitted by the 20th day of the succeeding month. Failure to comply constitutes a criminal offence under the Standards Act (Cap 496) and will attract a monthly penalty of 5% on the outstanding amount.

KEBS Defends Levy as a Quality Assurance Measure

In its justification for the new charge, KEBS stated the levy is intended to create a sustainable revenue stream to bolster its regulatory capacity. Speaking on the matter, KEBS Managing Director Esther Ngari, who was substantively appointed in October 2023, emphasized that the funds will be crucial for enhancing market surveillance, improving product testing, and strengthening quality audits to protect consumers from substandard and illicit goods. The agency argues that this move will reduce its dependence on the national exchequer and other fees, ultimately ensuring better enforcement of quality standards for both locally produced and imported goods. The Ministry of Trade anticipates that the new law will double KEBS's revenue from the levy from approximately KSh 700 million to KSh 1.4 billion annually.

Manufacturers Warn of Inevitable Price Hikes

The implementation of the levy has been met with significant concern from industry players, who warn that the additional operational cost will inevitably be passed on to consumers. The Kenya Association of Manufacturers (KAM), the sector's primary lobby group, has previously voiced concerns that such levies increase the cost of doing business in an already challenging economic environment. KAM CEO Tobias Alando, who took the helm in January 2025, has been a vocal critic of unpredictable tax policies that undermine the sector's competitiveness against cheap imports.

Industry analysts have pointed out that while the KSh 4 million cap benefits large-scale producers, mid-sized manufacturers will feel the full impact of the 0.2% charge, potentially raising their production costs significantly. The levy applies to a vast range of sectors, including food and agriculture (maize flour, cooking oil), construction (cement, steel), chemicals (paints, pharmaceuticals), and textiles, among others. This broad application means that the cost implications will be felt across the entire economy, affecting prices of basic commodities that are central to household budgets.

Implications for an Already Strained Consumer

For the average Kenyan household, the introduction of this levy translates to a higher cost of living. Consumer protection bodies like the Consumers Federation of Kenya (COFEK) have repeatedly highlighted the erosion of purchasing power due to cumulative inflation and new taxes. With manufacturers signaling their intent to pass on the new costs, Kenyans should brace for price adjustments on supermarket shelves. This comes at a time when many are already struggling with high costs for fuel, electricity, and basic foodstuffs. The new levy adds another layer of financial pressure, threatening to push inflation upwards and further strain household incomes. As manufacturers adjust their pricing structures to accommodate the levy, the full impact on consumer pockets is expected to become evident in the coming months.