The Kenya Association of Manufacturers (KAM) has appealed for urgent fiscal reforms after fresh talks with Kenya Investment Authority (KenInvest) chief executive John Mwendwa on Monday spotlighted a mounting value-added-tax (VAT) refund crisis that exporters say is choking cash flow and eroding competitiveness.
KAM vice-chair Hitesh Mediratta and chief executive Tobias Alando told KenInvest that an estimated KSh 15 billion in overdue VAT rebates remains unpaid despite exports being zero-rated.
The Kenya Revenue Authority (KRA) currently receives about KSh 2.5 billion a month for refunds well short of the KSh 4 billion manufacturers say is needed to keep pace with claims.
KAM proposed that the National Treasury boost the monthly allocation and establish a dedicated refund fund to speed up payments, warning that delays are tying up working capital and discouraging new investment.
Manufacturers also pressed for relief from the Export Promotion and Investment Levy (EPIL)imposed on selected imports at 10 % or 17.5 % and a slew of excise-duty increases introduced over the past two years.
They argue the charges raise production costs and blunt Kenya’s edge against regional rivals.
KAM further raised alarm over “ever-increasing” county fees, permits and levies, saying overlapping charges now rival national taxes in burdening firms and complicating logistics.
The lobby urged harmonisation of national and county regulations to restore predictability for investors.
KenInvest’s John Mwendwa welcomed the proposals, saying the agency would work with Treasury and the Presidency to fast-track solutions.
“A predictable tax and regulatory regime is core to our goal of making Kenya the premier investment gateway in Africa,” he said, according to a statement released after the meeting.
Both sides agreed to form a joint task force bringing together Treasury, KRA, county governments and private-sector representatives to draw up timelines for clearing the VAT arrears and reviewing new levies ahead of the 2026/27 budget cycle.
With export-manufacturing one of the pillars of President William Ruto’s Bottom-Up Economic Transformation Agenda, industry players warn that failure to resolve the refund logjam could stall recent gains in job creation and foreign-exchange earnings.
The task force’s initial report is expected before the end of August.
Written By Ian Maleve
