By Regan Oluoch
Kenya’s tea industry could receive a major funding boost if proposed regulations by the Ministry of Agriculture are approved, introducing a new levy on tea exports and imports to finance sector development.
The government estimates that the proposed tea export and import levy will generate about Sh1.42 billion annually to support key activities in the industry.
Of this, approximately Sh1.38 billion is expected to come from exports, based on 2023 performance, while imports would contribute about Sh40 million.
In 2023, Kenya exported more than 522 million kilograms of tea, earning Sh180.57 billion in foreign exchange.
“Based on the 2023 export data, the levy is expected to generate approximately Sh1.38 billion from export levy and Sh40 million from import levy, totaling Sh1.42 billion per annum,” the ministry said.
Under the proposed framework, exporters would pay 0.8 percent of the value of tea sold, while imported tea would attract a 100 percent levy.
The ministry clarified that the charge targets exporters and importers, not farmers or factories, adding that the 100 percent import levy is intended to protect local producers from cheap and low-quality tea imports.
“The levy is imposed on exporters and importers of tea, not farmers or factories. The 100 percent import levy is a protective mechanism, not a general revenue measure,” the ministry said.
The proposed Tea Levy Regulations, 2026, seek to reinstate the 0.8 percent levy under Section 53 of the Tea Act, 2020. The funds will be channelled into a dedicated sector fund.
A significant share of the revenue will go toward stabilising tea prices to protect farmers during periods of market downturns. Other allocations will support research, regulation, and infrastructure development in tea-growing counties.
“The levy is being restored to build a sustainable, industry-funded mechanism to invest in research, marketing, infrastructure and farmer price protection,” the ministry added.
Officials say the proposal is designed to address a funding gap that emerged after a previous tea levy was abolished in 2016, leaving key institutions such as research and quality assurance agencies underfunded.
Since then, the sector has relied heavily on limited government allocations despite increasing global price volatility.
If approved, the levy is expected to strengthen Kenya’s competitiveness in global tea markets by improving productivity, research, and promotion.
The Tea Research Institute would receive part of the funds to boost productivity, climate adaptation, and tea quality improvements, while the Tea Board of Kenya would continue overseeing regulation and promotion.
According to the ministry, Sh710 million would go to the farmer price stabilisation fund, Sh284 million to research, Sh213 million to Tea Board of Kenya operations, and Sh213 million to county governments for infrastructure.
Small-scale farmers, who produce the bulk of Kenya’s tea, are expected to benefit from improved price support mechanisms and additional payments during periods of low global prices.
The ministry has emphasised that farmers will not bear the cost of the levy, saying it will be collected from exporters and importers involved in tea trade.
