New Tea levy is seeking to boost farmer incomes and sector growth
By DMS
The government has defended the reintroduction of the Tea Levy, saying the new regulations will provide sustainable funding for the tea sector while protecting farmers from volatile global market prices.
Under the Tea (Levy) Regulations, 2026, tea exporters will pay a levy equivalent to 0.8 per cent of the auction value or customs value of tea exports, while importers of made tea will pay a 100 per cent levy on the value of imported consignments.
The Ministry of Agriculture and Livestock Development says the levy, which came into effect on May 1, is intended to finance research, market development, infrastructure and a farmer price stabilization fund.
According to the Tea Board of Kenya (TBK), the levy will not be charged to tea farmers. Officials argue that green leaf prices are determined by factory earnings and not directly by export levies.
“Smallholder farmers, cooperatives, factories, domestic retailers and local consumers are not required to pay the levy,” the board said in a public information campaign aimed at addressing concerns surrounding the new regulations.
The government estimates that the levy will generate approximately KSh1.42 billion annually. Half of the funds collected will be directed to a farmer income and price stabilization fund, while 20 per cent will support research and development through the Tea Research Institute. Another 15 per cent will fund regulatory activities by TBK, with the remaining 15 per cent allocated to tea-sector infrastructure projects in counties.
Officials maintain that the levy differs from ordinary taxes because all proceeds will remain within the tea industry rather than being remitted to the National Treasury.
The ministry has also dismissed claims that the levy will hurt Kenya’s competitiveness in international markets. It argues that the 0.8 per cent export charge is relatively modest and will finance research and marketing initiatives needed to secure better prices for Kenyan tea globally.
To protect local producers, the regulations impose a 100 per cent levy on imported bulk tea. However, value-added products such as tea bags, retail-ready tea packs of 10 kilograms or less, tea extracts and tea aroma products are exempt from the import levy.
The government says the exemptions are designed to encourage value addition and innovation within the industry.
Concerns over accountability have also been raised, given that a similar levy was abolished in 2016. In response, the ministry says the Tea Act, 2020 introduced stronger governance safeguards, including digital monitoring through the Integrated Management Information System (IMIS), mandatory public reporting and stakeholder oversight mechanisms.
According to the ministry, eleven stakeholder consultation forums were held across 20 tea-growing counties before the regulations were finalized.
Exporters and importers are now required to register on the TBK digital platform and submit levy declarations electronically before permits are issued.
The government says the ultimate goal of the levy is to create a stronger, more resilient tea industry capable of delivering stable incomes to farmers while maintaining Kenya’s position as a leading global tea producer.
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