The government has announced wide-ranging tax and regulatory reforms aimed at strengthening Kenya’s export-led growth strategy, with a particular focus on agricultural exporters.
The measures are contained in the Finance Bill 2026, which is set to be tabled in Parliament in March.
Speaking at the launch of Flamingo Group Investments’ Ksh2 billion expansion project in Naivasha, Cabinet Secretary for Agriculture Mutahi Kagwe said the reforms are designed to ease cash flow constraints, unlock reinvestment and restore exporter confidence after years of delayed VAT refunds and high statutory levies.
Among the key proposals is a reduction of input VAT from 16 per cent to 8 per cent, the removal of excise duty and export promotion levies on packaging materials, and the fast-tracking of VAT refunds through an offsetting mechanism.
Long-standing 100 per cent exporters will also be granted Export Processing Zone (EPZ) and Special Economic Zone (SEZ)-like status, eliminating VAT on local purchases.
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The reforms further include plans to expand air freight capacity through Kenya Airways and the entry of new international carriers, a move expected to lower logistics costs and improve market access for exporters.
During the event, Kagwe confirmed that the government has already paid Sh470 million of Flamingo Group’s Sh1.8 billion VAT refund backlog, with additional disbursements scheduled.
Flamingo Group’s Naivasha expansion is expected to create 500 new jobs and scale up value-added flower production for export to European and UK markets.
Industry players say the proposed reforms could unlock billions of shillings in stalled capital and accelerate investment across the horticulture, tea, coffee and livestock value chains.
If implemented, the measures are expected to strengthen Kenya’s competitiveness in global markets and reinforce its position as Africa’s leading horticultural exporter.
By Obegi Malack
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