The government has moved to address concerns from manufacturers over rising compliance costs following changes introduced under the Standards Levy Order 2025, which significantly raises the annual cap payable to the Kenya Bureau of Standards (KEBS).
Cabinet Secretary for Investments, Trade and Industry Lee Kinyanjui on Wednesday met manufacturing stakeholders in Nairobi to discuss the impact of the revised levy and chart a predictable path for its administration going forward.
At the centre of the discussions was the sharp increase in the maximum annual Standards Levy, which has risen from KSh 400,000 to KSh 4 million for the first five years under the new order, and is set to increase further to KSh 6 million by 2030. The levy is charged at 0.2 per cent of a manufacturer’s monthly turnover, excluding VAT, excise duty and discounts.
Manufacturers at the meeting warned that the higher cap could raise the cost of doing business, particularly for large-scale producers, even as the government defended the levy as critical to strengthening the country’s quality infrastructure and protecting consumers.
The Cabinet Secretary underscored the central role played by KEBS in trade facilitation, market access and consumer protection, saying sustainable funding for standards enforcement was essential as Kenya positions itself as a regional manufacturing hub.
However, the meeting also acknowledged safeguards built into the new levy regime to cushion small businesses. All manufacturers with an annual turnover below KSh 5 million remain fully exempt, a measure that has already benefited more than 10,000 micro, small and medium enterprises (MSMEs) in line with the Bottom-Up Economic Transformation Agenda.
Stakeholders further discussed the classification of manufacturers under the First Schedule of the Standards Levy Order 2025, with calls for greater clarity to avoid disputes and uneven application of the levy. There was also agreement on the need to transition smoothly to the new maximum annual ceilings to give manufacturers time to adjust.
To enhance certainty for industry players, the meeting resolved that future administration of the Standards Levy should be more predictable. Among the proposals adopted was the introduction of an escalation approach that would align levy adjustments with inflationary trends up to 2030 and beyond, rather than abrupt policy shifts.
In addition, the Ministry revealed that efforts are underway to review import inspection charges, a move aimed at lowering input costs for manufacturers and improving the competitiveness of locally produced goods.
A joint technical team drawn from the Ministry of Investments, Trade and Industry and KEBS has been tasked with fast-tracking the implementation of the agreed reforms and engaging further with stakeholders.
The Standards Levy is a mandatory monthly remittance payable by all manufacturers to KEBS and is calculated as a percentage of turnover, subject to an exemption threshold and an annual payment ceiling. The revised Standards Levy Order 2025 marks the most significant change to the levy in years, reshaping compliance costs for manufacturers while maintaining exemptions for small businesses.