Addressing the tax regime in the pharmaceutical industry

The Kenya Kwanza government promised to address the tax regime in the pharmaceutical industry to lower the cost of doing business.

The government proposed tax changes under the Finance Bill, 2025, aimed at the reclassification of raw materials for the manufacture of pharmaceuticals from “zero-rated” to “exempt” under the Value Added Tax regime threatened to raise the cost of production for local pharmaceutical firms. The proposal was, however, dropped.
The government is again, through the Finance Bill, 2026, attempting to reclassify raw materials for the manufacture of pharmaceuticals from “zero-rated” to “exempt” under the Value Added Tax regime, which may lead to an increase in the cost of production of pharmaceuticals, contrary to its promise.

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This Promise Tracker is an independent civic-accountability tool designed to monitor and document the progress of public commitments made by the Government of Kenya. Information presented on this platform is compiled from publicly available sources including government publications, parliamentary records, policy documents, and credible media reports. The classifications used in this tracker represent an evidence-based assessment by the platform’s researchers and should be understood as analytical judgments rather than official government determinations. While every effort is made to ensure accuracy and regular updates, the status of promises may evolve as new information becomes available. This website is not affiliated with or operated by the Government of Kenya.

Last updated: May 19, 2026 12:39 pm