Kenya: Pharmaceutical Manufacturers Warn of Disruptions Over Delayed Vat Exemptions

What the report says

Pharmaceutical manufacturers in Kenya are warning that slow processing of VAT exemptions could interrupt production and the supply of medicines and other health products. The concern was reported by Capital FM and distributed by AllAfrica, with the issue centered on the Finance Act, 2026 and how its tax changes are being implemented.

According to the Federation of Kenya Pharmaceutical Manufacturers, the industry says it is operating at roughly 30 percent of capacity while waiting for the exemptions to be fully applied. The law changed certain inputs, raw materials and packaging materials used in drug production from zero-rated to VAT-exempt status, but manufacturers say the approval process has become more complicated.

Instead of approving a broader list of eligible products, exemptions are now being handled shipment by shipment, which the federation says is difficult for an industry that imports large volumes each month. The group says the country brings in at least 500 containers of pharmaceutical-related supplies monthly, making individual approvals slow and impractical.

The manufacturers are urging the government to simplify the process so producers can access the exemptions without lengthy delays. The dispute matters because any disruption in the sector could affect both factory operations and the availability of healthcare products for patients in Kenya.