Agriculture Cabinet Secretary Mutahi Kagwe has warned against attempts to roll back the newly introduced 0.8 per cent tea export levy, insisting the charge is vital to finance marketing, research, and value‑addition programmes aimed at revitalising Kenya’s tea industry.
Appearing before the National Assembly Departmental Committee on Agriculture and Livestock, Kagwe defended the Tea Levy Regulations, 2026, telling legislators that the levy is central to strengthening Kenya’s global competitiveness through sustained funding for branding and market development.
“Going back would be a huge mistake. All countries that trade seriously in tea charge levies to develop their markets,” Kagwe said, urging lawmakers to support reforms such as direct sales and geographical indicators to protect Kenyan tea from being blended and rebranded abroad.
The discussions formed part of the scrutiny of the Ministry of Agriculture’s Sh79.06 billion budget, which prioritises fertiliser subsidies, irrigation expansion, climate‑smart agriculture, livestock transformation, and commercialisation under the Bottom‑Up Economic Transformation Agenda (BETA).
According to the government, the levy provides a sustainable funding structure for marketing, research, infrastructure development, and regulatory strengthening.
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The Tea Board of Kenya (TBK) said the reforms are designed to tackle persistent challenges, including low prices, weak global promotion, declining quality, and limited value addition. “The government is revitalising the tea industry to ensure the competitiveness of Kenyan tea and enhance returns to tea farmers,” the Board noted.
TBK Chief Executive Officer Willy Mutai explained that the levy followed extensive stakeholder consultations between 2021 and 2025. He said Section 53 of the Tea Act prescribes the distribution of proceeds: 50 per cent for income and price stabilisation for growers, 20 per cent for research, and 15 per cent each for infrastructure development and regulatory functions.
The levy, charged at 0.8 per cent of auction value or customs value for direct sales, is payable at the point of export. Tea imports will attract a 100 per cent tax on the value of made tea consignments. Mutai said the levy translates to about Sh2.28 per kilogramme of made tea, describing it as competitive compared to other producing countries such as India, Bangladesh, and Sri Lanka.
He added that the funds will support expanded marketing strategies targeting emerging and established markets, including Russia, China, West Africa, Asia, and North America. The Ministry has also been tasked with forming a multi‑stakeholder committee to drive a national marketing strategy aimed at reclaiming Kenya’s dominance in tea exports while reducing reliance on bulk sales.
“Supporting value addition aimed at reducing overreliance on bulk export and increasing proportion packaged, branded and speciality tea exports from Kenya,” TBK said in a statement. Mutai further noted that reforms will strengthen research into new tea varieties, improve quality standards, and tighten regulation to curb malpractice such as green leaf irregularities and counterfeiting of premium Kenyan tea brands.
The government also announced plans to establish warehousing hubs in strategic international markets, including the Democratic Republic of Congo (DRC), the United Arab Emirates (UAE), Ghana, and China, to expand Kenya’s global footprint.
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Following the commencement of the Tea Levy Regulations on May 1, TBK confirmed it had received requests from exporters seeking exemptions for tea purchased before the law took effect.
The Board announced it is developing refund mechanisms for levies charged on tea purchased between January 1 and April 30, 2026. The process will cover both auction transactions and direct sales contracts, provided exporters submit proof of purchase, evidence of levy payments, and documentation of contractual obligations with international buyers.
By Masaki Enock
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