Why manufacturers are clashing with State standards levy

 Investments Trade and Industry Cabinet Secretary Lee Kinyanjui.[Wilberforce Okwiri, Standard]

The government has defended a substantial increase in a mandatory quality standards levy, standing firm against a furious backlash from manufacturers.

They say the move threatens competitiveness and ignores pleas to ease a punishing business environment.

The dispute centres on the newly published Standards Levy Order 2025, which raises the annual maximum payment tenfold.

 

The levy, paid monthly by manufacturers to the Kenya Bureau of Standards (KEBS), is calculated at 0.2 per cent of turnover. 

Previously capped at Sh400,000 per year, the ceiling will now rise to Sh4 million for the next five years, before climbing Shto 6 million by 2030.

The new levies come at a time when the manufacturers have been urging the Kenya Kwanza administration to improve the business environment. 

Industry lobbies have complained of a worsening business environment marked by high energy costs and a raft of new taxes and levies introduced to boost government revenue.

In a statement following what it termed an "engagement" with manufacturers, the government acknowledged the concerns but showed no sign of reversing course. 

Trade Cabinet Secretary Lee Kinyanjui's office stated the meeting "affirmed the important role KEBS plays," justifying the need to strengthen quality infrastructure through the higher levies. 

The ministry highlighted an exemption for firms with an annual turnover below Sh5 million, which it says benefits over 10,000 micro, small, and medium-sized enterprises (MSMEs).

However, for larger manufacturers, the hike represents a significant new financial burden, manufacturers have said. 

The ministry, at the same time, revealed a planned review of import inspection charges to “foster competitiveness and that a ministry team would work with KEBS to implement the deliberations.” It did not specify if the core increase would be altered.

Sector executives argue the move contradicts government promises to spur industrial growth. 

They say operating costs have soared due to increased power tariffs, new housing and social health insurance levies, and persistent issues with customs efficiency.

The Standards Levy is a monthly remittance on goods manufactured or services offered for sale, excluding value-added tax, excise duty, and discounts. 

The ministry stated the revised levy aims to provide a sustainable funding model for KEBS, to “enable the national standards body engage in quality assurance and metrology.”