The Tea Board of Kenya (TBK) has moved to address growing concerns over a new tea levy, saying the charge is designed to fund industry development programmes and ultimately raise returns for tea farmers across the country.
In a press statement dated May 8, 2026, TBK Chief Executive Officer (CEO) Willy Mutai said the government introduced the levy through the Tea (Levy) Regulations 2026 to provide a sustainable funding model for marketing and promotion, research and development, infrastructure development, and strengthening the tea industry regulatory framework.
“In an effort to enhance returns to tea farmers, the government is revitalizing the tea industry to ensure the competitiveness of Kenyan tea,” Mutai stated.
The levy, provided under Section 53 of the Tea Act, 2020, was operationalized through Gazette Notice No. 82 on April 1, 2026, following stakeholder and public participation conducted between 2021 and 2025. It imposes a rate of 0.8 per cent of auction value or customs value for direct sales, payable at the point of export. Tea imports attract a 100 per cent levy on the import value of each consignment of made tea.
TBK clarified that while the levy is an export and import charge, it is borne by consumers but payable by tea exporters and importers, not by the tea grower.
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At 0.8 per cent of auction value, TBK said the charge translates to approximately Ksh 2.28, equivalent to USD 0.018, per kilogram of made tea. The board noted that comparable levies exist in other tea-producing and consuming countries, with Sri Lanka charging between Ksh 1.61 and Ksh 4.03 per kilogram and India applying a 5 per cent goods and services tax on tea.
Under the Tea Act, revenue collected through the levy is to be distributed as follows: 50 per cent to income and price stabilization for tea growers; 20 per cent to research; 15 per cent to infrastructure development; and 15 per cent to regulation.
TBK outlined five key areas the levy will address. First, the Board said it will implement a market development strategy targeting new and emerging markets in China, West Africa, Russia, the Commonwealth of Independent States countries, North America and Asia. The Ministry of Agriculture and Livestock Development is in the process of constituting a multi-stakeholder committee to lead market development activities, with warehousing hubs planned in the Democratic Republic of Congo, the United Arab Emirates, Ghana and China.
Second, TBK said the funds will help recapture tea re-export markets from the dominance of importing countries, in order to reduce transfer prices and enhance farm earnings. Third, the board said it will support value addition initiatives to reduce overreliance on bulk exports and increase the proportion of packaged, branded, and speciality teas exported from Kenya.
Fourth, TBK said the levy will fund research into new tea varieties and products to enhance quality and promote product diversification. Fifth, the board said it will use the revenue to strengthen the regulatory framework to address challenges, including Greenleaf malpractices, counterfeiting of premium tea garden marks in export markets, poor governance along the value chain, and exploitation of tea farmers.
The levy exempts value-added teas packed in containers holding not more than 10 kilograms, tea extracts, tea aromas and Kenya tea value-added in export processing zones and special economic zones for local consumption.
Following the rollout of the levy on May 1, 2026, TBK said it received several requests from tea exporters seeking exemptions for teas purchased at the Tea Auction or under forward contracts signed on or before April 30, 2026. In response, TBK on May 4, 2026, issued a circular to all tea exporters stating that the board will consider refunding the levy for amounts paid by buyers and exporters on teas purchased between January 1, 2026 and April 30, 2026.
Exporters seeking the refund were required to submit their claims supported by evidence of auction purchase on or before April 30, 2026; proof of levy payment; and documentation demonstrating prior contractual commitments with international buyers.
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The board said the move is meant to address transitional challenges and ensure traders do not incur losses arising from contractual commitments entered into with international buyers before the commencement of the tea levy.
“The government is committed to the revitalization of the tea industry by addressing the challenges facing the industry to enhance returns to tea farmers in line with the Bottom-up Economic Transformation Agenda,” Mutai said.
The Ministry of Agriculture and Livestock Development and TBK said they will continue engaging tea stakeholders in finding lasting solutions to the challenges facing the Kenya tea industry.
By Benedict Aoya
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