The Trade, Investments and Industry Ministry has defended a new standards levy imposed on manufacturers from August 2025, denying that it was executed non-procedurally.
The ministry, through the Kenya Bureau of Standards (Kebs), gazetted the Standards (Standards Levy) Order, 2025, in August 2025-triggering a legal fight that saw the High Court suspend the levy following an application by the Green Thinking Action Party (GTAP), which challenged the new levy, arguing that the new payments would cripple the operations of manufacturers.
The political party further argued that the increase in the levy was implemented in violation of the Constitution and in a discriminatory, unreasonable, and unfair manner.
However, in a submission to the High Court, Attorney General Dorcas Oduor said the Trade Cabinet Secretary Lee Kinyanjui is lawfully empowered to amend and vary the Standards Levy Order, and the variations effected in Legal Notice 136 of 2025 were a valid exercise of that power.
The ministry said the Standards Levy Order 2025 aims to fulfil the statutory objectives of the levy, including funding the development and promotion of standardisation, quality control of goods and services, research and training, and ensuring that the objectives of the levy are achieved.
The Attorney General added that the inclusion of sectors such as energy generation, software development, computer engineering services, and dry cleaning as manufacturers is fully consistent with the Standards Act, which defines a manufacturer broadly and places it within the government’s statutory responsibility to bring such industries under the ambit of the Act.
‘The legal notice gives effect to the parent Act. Standards Act defines manufacture in broad and purposive terms to include producing, processing, installing, testing, operating, and using activities that are intrinsic to the sectors,’ the AG submitted.
Ms Oduor opposed the suspension of the collection or charging of the new levy, saying the move would materially impair the operations of the industry and Kebs, frustrating the objectives of the Standards Act and the purpose of the levy.
‘Conversely, in the unlikely event that the petition succeeds, any sums collected under the new legal notice are recoverable and compensable, given that the levy is administered by a statutory body, rendering the requested interim suspension unnecessary and disproportionate,’ the AG said.
Under the new rules, manufacturers must pay a levy of 0.2 percent of their monthly turnover in respect of manufacturing activities.
The levy is recoverable at source, with payments to be made through the KRA iTax system on or before the 20th day of the following month.
While the levy is still calculated at 0.2 percent of the monthly turnover, excluding value-added tax, excise duty, and discounts, the revised order adjusts the annual levy cap from Sh400,000 to Sh4 million for the first five years.
The Attorney General asked the court to dismiss the suit, stating that the matter should have been first referred to the Standards Tribunal, which has powers to determine disputes relating to the imposition, calculation, applicability, and enforcement of the Standards Levy.
Furthermore, the court heard that, before the enactment, the levy was subject to adequate and lawful public participation. There were public forums in Nairobi, Nakuru, Mombasa, Nyeri, Garissa, Eldoret, and Kisumu, as well as virtual sessions.
Ms Oduor said the 2025 order has enhanced the scope of industries and scaling up reasonably and progressively, considering current conditions and realities, thereby fulfilling the objectives of the original order (Standards Levy Order 1990).
The party in response said that the High Court has jurisdiction to hear and determine matters seeking redress of a denial, violation, or infringement of fundamental freedoms.
James Oketch submitted on behalf of the party that the public participation was contrary to the Constitution, as public bodies are required to comply with the principles of fairness and accountability in the administration of fees and levies and ensure there is a reasonable degree of predictability with respect to the level of charging levies and fee increments.
‘Simply put, there is no room for levy increments in the manner that has been done herein,’ Mr Oketch submitted.
He said their position is that businesses operate in a competitive market, and given the absence of a legal basis to control and enforce pass-through costs resulting from the imposition of the Standards Levy, it similarly means the businesses are free to pass through the added levy cost to consumers, for them to maintain their margins.
On allegations that the suspension would cripple the operations of Kebs, Mr Oketch said the regulator has eleven other sources of revenue from rendering of services, which contribute the largest proportion to its total revenue, and the Standards Levy is not a major source of its revenue.