The Kenya Bureau of Standards (Kebs) has suffered a fresh blow after the High Court rejected its push to impose factory taxes on a book publisher, marking a back-to-back defeat for the agency.
The court rejected an appeal by Kebs, seeking to revive a Sh52 million standards levy against book printer Oxford University Press East Africa, saying that book publishers are not manufacturers and cannot be subject to the levy under the Standards Act.
This is the second such verdict in favour of book publishers in a fight against the monthly Kebs factory tax, which is charged at 0.2 percent of the monthly turnover of goods manufactured or services offered, with the Standards (Standards Levy) Order 2025 capping it at Sh4 million per annum for five years, with an exemption for manufacturers with an annual turnover of less than Sh5 million.
In April 2026, the High Court upheld a tribunal’s decision to reject a factory tax claim by Kebs against Moran (E.A) Publishers, saying that the book publisher outsources printing services and doesn’t qualify as a manufacturer.
In its ruling, the High Court dismissed an appeal by Kebs and upheld an earlier decision of the Standards Tribunal that freed Moran from the multi-million-shilling demand.
The dispute stemmed from demands issued by Kebs in January and March 2024, seeking Sh52.1 million in levies and penalties covering the period between 2017 and 2023.
Moran challenged the claim before the Standards Tribunal, arguing it is not a manufacturer and, therefore, not liable to pay the levy imposed under the Standards Act.
And now, the High Court has sided with Oxford University Press East Africa, saying publishers are not automatically manufacturers and Kebs failed to prove the publisher carried out such activities that attracted the levy under the Standards Act.
The court upheld an earlier Standards Tribunal decision that cancelled Kebs’ demand for Sh52.1 million in alleged unpaid standards levy and penalties issued against the educational publisher in January 2024.
The dispute began in 2023 after Kebs demanded the money from Oxford University Press East Africa for unpaid Standards Levy and penalties covering 2017 to 2023. Kebs argued that Oxford qualified as a manufacturer because it exercised control over the production of books despite outsourcing the printing.
Oxford challenged the demand before the Standards Tribunal, maintaining it was a publisher rather than a manufacturer because independent printing firms carried out the physical production and had already paid the applicable standards levy. The Tribunal agreed with Oxford in July 2024, prompting Kebs’s appeal.
The dispute centred on whether Oxford qualified as a manufacturer because it commissioned, published and distributed books, even though independent companies handled the physical printing and binding.
Kebs argued the law gives a broad meaning to manufacturing and said Oxford exercised overall control over creating finished books despite outsourcing production.
Oxford maintained it was a publisher rather than a manufacturer because third-party printers carried out the printing and binding and remitted any applicable standards levy.
It publishes textbooks, dictionaries and other educational materials for schools across the region, but contracts independent firms to print and bind its books.
The court agreed that the Standards Act gives an expansive definition of manufacture but found that alone was insufficient to impose the levy.
“I agree with the appellant that the definition of manufacture under section 2 of the Standards Act is expansive and is not confined to the conventional transformation of raw materials into finished goods in a factory,” the court said.
However, he added that the wider definition did not remove KEBS’ obligation to establish the factual basis for liability before demanding payment.
“The appellant was required to establish the factual activities undertaken by the respondent which brought it within the statutory process of manufacture,” the court said.
Court records showed Oxford produced publishing agreements with authors and contracts covering paper supply, printing and binding services.
The evidence indicated independent suppliers in Kenya and abroad physically printed and bound the books before Oxford marketed and distributed the finished publications.
The court said commercial responsibility for bringing books to market did not automatically make a publisher a manufacturer under the Standards Levy Order.
“There is a distinction between being commercially responsible for bringing a product to market and actually engaging in the statutory process of manufacture,” it said.
It ruled that Kebs did not present sufficient evidence that Oxford carried out manufacturing activities contemplated under the law.