The Ministry of Agriculture and Livestock Development has moved to dispel growing concerns over the proposed tea levy, insisting that farmers will not bear the cost and that all proceeds will be reinvested directly into the industry.
Under the draft framework, tea exports will attract a levy of 0.8 per cent of the auction value or customs value for direct sales, while imported bulk tea will face a 100 per cent levy. Farmers, factories, domestic traders, aggregators and value‑added teas will remain exempt.
According to the regulations, 50 per cent of the collections will be channelled toward farmer income support and tea price stabilisation. Another 20 per cent will fund research and development through the Tea Research Institute, while 15 per cent will support the regulatory functions of the Tea Board of Kenya. The remaining 15 per cent will be allocated to infrastructure development in tea‑growing counties.
The Tea Board has launched a public awareness campaign to counter misconceptions, particularly claims that the levy will reduce farmer earnings. Officials emphasise that the levy will be paid by exporters, not producers, and that the stabilisation fund is intended to cushion farmers against market fluctuations.
Stakeholders have raised concerns that exporters may pass the cost back to farmers by lowering auction prices. However, the Board argues that enhanced oversight under the Tea Act, 2020, together with the competitive auction system, will prevent exploitative practices.
Officials have also dismissed fears that levy proceeds could be diverted to unrelated government activities. They point to the Tea Fund, established under Section 54 of the Tea Act, which is ring‑fenced with legally prescribed allocations for farmer support, research, regulation and infrastructure.
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The reintroduction of the levy has drawn scrutiny, with critics recalling a 2016 task force recommendation for its removal. The Board maintains that past concerns were tied to governance and accountability rather than the levy itself. Since then, new safeguards, including digital monitoring systems and multi‑stakeholder oversight mechanisms, have been introduced to prevent misuse.
The Board further rejected assertions that the tea industry is overtaxed, noting that unlike other taxes remitted to the National Treasury, all proceeds from the levy will remain within the sector. Impact assessments, it says, show that reinvestment, market expansion and improved farmer returns outweigh the cost.
On imports, officials clarified that the 100 per cent levy targets bulk‑made tea imports to protect local production. Retail‑ready value‑added teas packaged below 10 kilogrammes, as well as tea extracts and aromas, will remain exempt.
The Board also defended the consultation process, saying views collected during 11 stakeholder forums were conducted across 20 counties, with participation from tea farmers, factory representatives, the Kenya Tea Development Agency (KTDA), the Kenya Tea Growers Association (KTGA), the Independent Tea Producers Association of Kenya (ITPAK) and other industry players were incorporated into the final regulations.
By Masaki Enock
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