Kenya's private sector wants the newly gazetted Standards Levy Order suspended, warning it could push up the cost of doing business and erode local industries competitive edge.
The Kenya Bureau of Standards (Kebs), gazetted the Standards (Standards Levy) Order, 2025 under Legal Notice No. 136 of August 8, 2025.
The order requires all manufacturers to remit 0.2 per cent of their monthly turnover, exclusive of VAT and discounts, subject to a capped annual amount.
While the levy rate itself remains unchanged, the 2025 order introduces major revisions to the maximum payable limits.
The cap has been raised to Sh4 million per year for the first five years, increasing to Sh6 million annually thereafter.This marks a tenfold increase from the previous cap of Sh400,000 per year.
Business Membership Organisations say the sharp escalation will place an unprecedented financial burden on the country’s productive sector.
They include the Kenya Association of Manufacturers, Kenya Private Sector Alliance, Fresh Produce Exporters Association of Kenya, Cereal Millers Association, Eastern Africa Grain Council and Kenya Flower Council, among others
At the maximum rate, firms will effectively pay up to about Sh11,000 per day during the first five years, rising to roughly Sh16,000 per day thereafter, inclusive of weekends and public holidays.
According to the industry lobby groups, such abrupt fiscal changes risk weakening the private sector’s capacity to create jobs, attract investment and expand the government’s own tax base.
“While government revenue is critical for national development, disproportionate levies threaten business continuity, employment and future investment,” the associations said in a joint statement.
They warned that the added cost would ultimately be passed on to consumers, placing Kenyan manufacturers at a disadvantage compared with imported goods.
Private sector players also argue that imports are not subjected to the Standards Levy, creating an uneven playing field for local manufacturers.
The levy, they note, is unique to Kenya and is not applied in other East African Community member states, raising concerns about regional competitiveness.
They say the move could divert investment to neighbouring countries where manufacturers face lower regulatory costs.
Concerns have also been raised about the classification of certain sectors under the levy framework.
For instance, naturally grown commodities such as flowers have been classified as manufactured goods, a move the industry describes as “a legal overreach-.”
The flower sector already pays for mandatory inspections, certifications and licences from multiple government agencies.
Applying the standards levy to these businesses, stakeholders argue, effectively amounts to double taxation.
Similar concerns have been raised by the mining and quarrying sectors, which operate under multiple regulatory regimes and pay several statutory levies and compliance fees.
Industry players further note that the increase in the levy does not necessarily translate into improved service delivery. They say businesses already pay significant amounts to KEBS for services such as standard marks, inspections, testing and certification.
“With the new cap, some companies could end up paying more than Sh8 million annually to a single regulator,” the group, led by KAM CEO Tobias Alando, said.
Businesses also warn that since manufacturing operations are often financed through credit facilities, firms may be forced to borrow more to meet the levy obligations.
This could be particularly difficult at a time when many manufacturers are holding high levels of unsold inventory.
The matter is currently before the High Court, with a hearing scheduled for April 13, 2026.
While respecting the ongoing judicial process, the private sector is calling for the immediate suspension of the Standards Levy Order, 2025 and a return to stakeholder consultations to address concerns about the rising cost of doing business and manufacturing competitiveness.
The groups are also advocating for an independent review of Kebs’ financing framework to ensure it aligns with constitutional and service-based principles, as well as improved transparency through annual reporting and audits.
In addition, they propose the creation of a joint public–private working group comprising Kebs, the Ministry of Investments, Trade and Industry and representatives of the business community to design sustainable financing mechanisms for standards enforcement.
They are also calling for exemptions for industries that do not fall under Kebs technical obligations, including horticulture, pharmaceuticals and firms operating under special schemes such as Export Processing Zones.
The groups say a balanced approach is necessary to protect industry competitiveness, safeguard jobs and support Kenya’s economic recovery while maintaining high product standards.
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