Nairobi — Pharmaceutical manufacturers have warned that delays in processing VAT exemptions could disrupt the production and supply of medicines and other healthcare products in Kenya.

The Federation of Kenya Pharmaceutical Manufacturers says manufacturers are operating at only about 30 percent capacity as they await the full implementation of VAT exemptions under the Finance Act, 2026.

The federation says the law changed the classification of inputs, raw materials and packaging materials used in pharmaceutical production from zero-rated to VAT-exempt.

However, manufacturers say the approval process has become cumbersome, with exemptions now being processed on a consignment-by-consignment basis instead of through approval of a list of products.

The federation says the industry imports at least 500 containers each month, making individual approvals for every consignment impractical.

It has called for the government to streamline the process and ensure manufacturers can access the exemptions without prolonged administrative delays.

The manufacturers say the disruptions threaten not only the industry's operations but also the availability of healthcare products for Kenyans.