The Ministry of Trade and Investments, in collaboration with the Kenya Bureau of Standards (KEBS), has proposed a new law, the Standards (Standards Levy) Order 2025, which seeks to impose a new tax on manufacturers and service providers.
The proposal, which was reviewed by the National Assembly's Committee on Delegated Legislation, recommends a levy of 0.2 percent on the customs value of goods manufactured or services offered each month, excluding VAT, excise duty, or discounts.
According to the proposal, the maximum annual levy a manufacturer can pay will be KSh4 million, a limit that is expected to rise to KSh6 million by 2030.
The proposal was presented by the Industry Principal Secretary Juma Mukhwana, who represented the Trade and Investment Cabinet Secretary, Lee Kinyanjui, and KEBS CEO, Esther Ngari, who appeared before the committee on Tuesday, August 5.
"The National Assembly’s Committee on Delegated Legislation has reviewed a new proposal seeking to introduce a levy on manufacturers across the country," a statement from Parliament stated.
"He briefed members on the proposed order, which recommends a levy of 0.2% on the customs value of goods manufactured or services offered each month. This calculation excludes VAT, Excise Duty, and applicable discounts," it added.
After scrutiny of the proposal, the committee questioned the legality and fairness of the law, which they claim will place a heavier burden on small enterprises.
According to the committee, the ministry should engineer a proportional rate system that would ensure that all businesses are treated fairly under the law.
"They pointed out inconsistencies, particularly the maximum levy limit of KSh4 million for companies producing goods worth over Ksh2 billion - a figure expected to rise to Ksh6 million by 2030," Parliament stated.
However, responding to the concern, the PS assures that most manufacturers in the country would not be affected by the levy, since they earn less than Ksh5 million annually.
If it sails through, the law is expected to double KEBS revenue from the current Ksh700 million to Ksh1.4 billion, according to the ministry.
"In his remarks, PS Mukhwana clarified that most manufacturers in the country fall under the Micro, Small and Medium Enterprises (MSMEs) category and earn below KSh5 million annually, meaning they would be exempt from the levy," Parliament stated.
