International taxi-hailing firms will now be required to pay Sh500,000 to renew their licences.
In the new rules announced on Tuesday by the Transport Cabinet Secretary James Macharia, the taxi-hailing firms will acquire three-year renewal licences.
Several international taxi-hailing firms operate in Kenya, including Uber and Bolt (formerly known as Taxify).
Digital taxi operators have also been hit with Sh500 fee for a renewable badge.
CS Macharia's directive also requires any person applying for a licence for a digital hailing service vehicle to have a tax compliance certificate from Kenya Revenue Authority, a contract between the driver and owners of the vehicle and a certificate of registration.
But the operators expressed dismay over the government's move, saying the licence fee is too high considering they have not been remitting anything.
"This will limit small players to penetrate the market," Bolt's Kenya Country Manager Ola Akinnusi.
However, Mr Akinnusi said that the regulations show that the digital taxi market is growing and lucrative.