Prices of essential items are set to rise in Kenya after the government published regulations enhancing the standards levy charged on nearly all manufactured products by 15 times.This follows the publication of the Standards Levy Order, 2025, by the Ministry of Trade, Industry and Investment, which caps the maximum standards levy paid monthly by large manufacturing firms at Ksh4 million ($30,959) for the first five years, rising to Ksh6 million ($46,439) after five years. Unlike the existing framework that caps monthly payments at Ksh400,000 ($3,095) regardless of turnover, the new levy order scraps the turnover basis. Instead, it pegs charges on the customs value of goods, with a higher ceiling of Ksh4 million—set to rise to KSh6 million by 2030. The regulation requires firms to pay 0.2 percent of the customs value of manufactured goods—net of Value Added Tax, excise duty and discounts— monthly to the Kenya Bureau of Standards (Kebs). The widening of the cap effectively broadens the tax base and significantly raises the burden on large manufacturers, especially those with heavy import dependencies.The levy covers a wide range of essentials, including drugs, maize and wheat flour, cooking oil, fertiliser, animal feeds, cement, steel, beverages, bottled water, pharmaceuticals, detergents, plastics, batteries, tyres, paints and construction materials. Industry players warn that the broad scope will push up production costs and, in turn, consumer prices.However, micro, small and medium enterprises with an annual turnover of less than Ksh5 million will be exempt from the Standards Levy. The Kenya Association of Manufacturers (KAM), an industry lobby, has raised concerns that applying the levy across nearly all goods—including raw materials—will raise costs throughout the value chain. KAM invited its members to submit feed back by August 21, ahead of engagements with policymakers. The new levy comes at a time when the State is under a tight fiscal squeeze, prompting it to roll out fresh taxes and raise existing fees to bolster revenues. In recent months, government agencies have hiked charges for motor vehicle registration, passport processing and business permits, arguing that parastatals must become self-sufficient and less dependent on the Exchequer.Alongside new taxes such as the housing levy and the sugar levy, these measures have fuelled fears of increasing inflationary pressures. For manufacturers, the Standards Levy piles onto existing headwinds—rising energy costs, forex volatility and weak consumer demand. With the levy tied to customs value, firms warn it could hit hardest those sectors dependent on imported raw materials. Government officials, however, defend the measure, saying it will strengthen Kebs’ capacity to test and certify products, align Kenyan goods with global standards, and protect consumers. They argue that the 0.2 percent rate is modest and unlikely to disrupt production significantly. Failure to pay the levy will attract a late-payment penalty of 5 percent of the unpaid amount (ICE NAIROBI)

Fonte notizia: Business Daily