A range of small businesses such as photocopy, tailoring, and photography studios have been rattled as the Kenya Bureau of Standards (Kebs) moved to enforce a decades-old levy.
Under the Standards Levy (Amendment) Order 1999, each manufacturer is liable to pay the bureau of Standards a monthly levy recoverable at source at the rate of 0.2 per cent of the ex-factory price of products manufactured in a month but excluding value-added tax and discounts.
According to the regulation, each manufactured product during any given month is subject to a standards levy of a maximum of Sh400,000 per annum and a minimum of Sh1,000 a month payable through the Kenya Revenue Authority (KRA) iTax system standards levy account on or before the 20th day of the succeeding month.
“A manufacturer is defined to include a person or persons who produce, process, treat, install, test or operate and use. Persons who manufacture or intend to manufacture are required to notify the Managing Director Kebs” Kebs said in a notice.
The Kebs list of manufacturers includes tailoring, printing, publishing, screen printing, photocopying, and photographic studios. It also includes dry-cleaning, weaving, embroidery and knitting among others.
A spot-check by Nation, however, revealed that most small traders in Nairobi including tailors, photocopiers, and photography studios were unaware of the levy demanded by Kebs.
“I am unaware of the levy demanded by Kebs but I hope they will not try and enforce it at this time because economic times are tough and adding a fresh layer of tax on our operations would be harmful,” a trader who runs a T-Shift and posters printing business on Nairobi’s Jinsala road said.
Revenue pressure
The tax reminder by Kebs comes amid revenue pressure on the State against the backdrop of economic shocks due to the Covid-19 pandemic and the Russia-Ukraine war. The government is presently highly pressured to enhance tax compliance and step-up revenue collection to finance public goods and services.
KRA has resorted to a raft of strategies including intelligence checks and automation of its revenue systems to boost compliance and collections.
Last week, the taxman announced that the sale of goods and services covered under the excise tax law including beer, juice, mobile airtime, cigarettes, and petroleum are set to be monitored in real-time—making a fresh layer of revenue streams to be administered on a technology-backed platform.
The KRA targets to collect Sh297.2 billion in revenues from excise duty by June and expects to increase collection to Sh521.5 billion in 2027. BY DAILY NATION