Manufacturers face heavy penalties for noncompliance with KEBS 0.2 per cent standards levy

The Kenya Bureau of Standards (KEBS) has directed all manufacturers to pay a standards levy of 0.2 per cent of their monthly turnover, following the gazetting of the Standards (Standards Levy) Order 2025 under Legal Notice No. 136 dated August 8, 2025.

According to the notice, the levy—recoverable at source—applies to all manufacturing activities, net of Value Added Tax, Excise Duty, and any applicable discounts, and is capped at Sh4,000,000 per year.

Manufacturers with an annual turnover of less than Sh5,000,000 are exempt from the levy. Payments must be made through KRA iTax on or before the 20th day of the following month.

"Following the gazettement of Standards (Standards Levy) Order 2025 vide the Legal Notice No. 136 dated August 8, 2025, all manufacturers are required to remit to Kenya Bureau of Standards, standards levy, recoverable at source, at the rate of zero point two percent (0.2 per cent) of their monthly turnover in respect of manufacture undertaken, Net of Value Added Tax, Excise Duty and Discounts where applicable, subject to a maximum of Kenya Shillings, Four Million Only, (Sh4,000,000) per annum," reads the KEBS notice.

"The order takes effect immediately following the gazettement. Failure to comply with the standards levy order of 2025 is an offence under the Standards Act, CAP 496, laws of Kenya."

Definition of manufacturer

Under the notice, a manufacturer is defined as any person or persons who produce, process, treat, install, test, operate, or use goods.

All manufacturers, or those intending to manufacture, must notify the Managing Director of KEBS by completing registration forms SL/1, available on the KEBS Information Management System (KIMS).

Failure to notify the managing director constitutes an offence and does not exempt a manufacturer from paying the levy. Non-compliance attracts a penalty of 5 per cent per month for the period the levy remains unpaid.

"Note that failure to notify the managing director not only constitutes an offence under the Act but also does not absolve a manufacturer from paying the standards levy and penalty as prescribed in 108 (3) of the Standards Act, which is 5 per cent monthly for the period the levy remains unpaid."

The notice outlines a wide range of activities covered by the levy. In building and construction, this includes road and bridge construction, waterways, building renovations, boreholes, dam construction, masonry, plumbing, roofing, lift installations, quarrying, and the manufacturing of construction materials.

Mechanical engineering covers assemblies, metal works, general repairs, spare parts manufacturing, refrigeration, and air conditioning.

Electrical engineering includes power generation, electrical and electronic equipment, lifts, air conditioning, and the installation of medical equipment.

Food and agriculture activities include pre-packaged foods, fresh fruits and vegetables, meat and fish processing, bakeries, animal feeds, coffee and tea processing, and seed propagation.

Chemicals and related industries include petroleum, gas, coal, water treatment, fertilisers, paints, polymers, cosmetics, pharmaceuticals, medical devices, printing, detergents, ceramics, and industrial gases.

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KEBS emphasises that this list is for guidance purposes only and does not override the definition of a manufacturer under Section 2 of the Act.

Manufacturers are encouraged to seek further clarification or assistance from the Levy Section at any KEBS office, via email at [email protected], or through the KEBS website.