The Kenya Association of Manufacturers (KAM) has been added as a party to a petition challenging a new standards levy that industrialists claim will significantly increase their operating costs. The High Court ruled that KAM, whose members are directly affected by the levy, is a necessary party to the petition. The court's decision allows KAM to participate in the case and help settle all issues raised.
The petition, filed by the Green Thinking Action Party (GTAP), challenges the Standards (Standards Levy) Order, 2025, which introduced the 0.2% levy on manufacturers' monthly turnover. The levy, excluding VAT, excise duty, and discounts, is payable through the Kenya Revenue Authority's iTax system by the 20th day of the following month. The new order also increased the annual cap on the levy from Sh400,000 to Sh4 million for the first five years.
The government has defended the levy, arguing that the Cabinet Secretary was lawfully empowered to amend and vary the Standards Levy Order. In submissions filed through the Attorney General, the government said Legal Notice No. 136 of 2025 was a valid exercise of that power and was intended to strengthen funding for standardisation, quality control, research, and training.
The government claims that public participation forums were held in several cities, including Nairobi, Nakuru, Mombasa, Nyeri, Garissa, Eldoret, and Kisumu, alongside virtual sessions. However, GTAP disputes the adequacy of the public participation, arguing that manufacturers operate in competitive markets and may pass the additional costs to consumers without a legal mechanism to prevent it.
The court has given KAM seven days to file a replying affidavit and its submissions before delivering its judgment on October 30. The petition raises questions over compliance with Article 206 of the Constitution and Section 24 of the Public Finance Management Act. The court also identified public participation as a key issue in the case, including whether the amendment introducing the new levy complied with Article 10 of the Constitution.
KAM's participation in the case is crucial, as the petition relies on an affidavit by one of its officials outlining the alleged adverse effects of the levy on manufacturers. The association's members are directly affected by the standards levy, and their interests will be represented in the case. The court's decision ensures that all parties affected by the levy have a chance to present their arguments.
The dispute over the standards levy has significant implications for Kenya's manufacturing sector. If the levy is implemented, manufacturers may need to adjust their pricing strategies, potentially affecting consumers. The court's judgment on October 30 will provide clarity on the implementation of the levy and its impact on the manufacturing sector.
Key points
- The Kenya Association of Manufacturers has been added as a party to a petition challenging a new 0.2% standards levy on manufacturers' monthly turnover.
- The petition challenges the Standards (Standards Levy) Order, 2025, which introduced the levy and increased the annual cap from Sh400,000 to Sh4 million.
- The court's judgment on October 30 will determine the fate of the levy and its impact on Kenya's manufacturing sector.
