Nairobi: The Government is revitalising the tea industry by introducing a levy to provide a sustainable funding model to promote competitiveness of the Kenyan leaf in the export market.
According to Kenya News Agency, the Tea Board of Kenya states that the levy would facilitate key programmes in the sector, including marketing, promotion, research, and infrastructure development, and also ensure that regulatory frameworks in the industry are strengthened. The statement, signed by the Board’s Chief Executive Officer, Willy Mutai, noted that the reforms aim to address challenges facing the industry by enhancing better returns to tea farmers in line with the Bottom Up Economic Transformation Agenda (BETA).
Mutai explained that the new tax under the tea levy regulation 2026 was formulated after an extensive stakeholder and public participation process spanning four years from 2021 to 2025, as mandated under the constitution and statutory instrument Act of 2013. ‘The regulation is in accordance with section 53(50) of the Tea Act, which provides that the tea levy shall be applied on income and price stabilisation of tea growers 50 percent, research at 20 percent while infrastructure development and regulation each get 15 percent, respectively,’ the statement read in part.
The regulation will now impose a levy at the rate of 0.8 percent of the auction value or custom value for direct sales payable at the point of exports, while tea imports will attract a 100 percent import tax. Mutai highlighted that the new levy, translating to approximately Sh. 2.28 per Kilogramme of made tea, was comparatively lower than rates in other tea-exporting countries like India, Bangladesh, and Sri Lanka, where rates can reach as high as 5 percent.
He further emphasized that the levy is crucial for funding marketing development strategies to open up emerging markets in countries such as Russia, China, West Africa, Asia, and North America. The Ministry of Agriculture and Livestock Development has been tasked with creating a multi-stakeholder committee to spearhead the marketing strategy to recapture the dominance of tea re-exporting countries by embarking on value-added initiatives.
The press release also mentioned plans to support value addition aimed at reducing overreliance on bulk export and increasing the proportion of packaged, branded, and specialty tea exports from Kenya. Additionally, there are efforts to resuscitate research and strengthen the regulatory framework to enhance tea quality and clamp down on Greenleaf malpractices, including counterfeiting of premium tea.
Following the commencement of the tea levy regulation 2026 on May 1st, Mutai noted that the board received requests from tea exporters for exemption of teas purchased at the auction or forward contracts signed before April 30th, 2026. He confirmed that the board was working on modalities to refund levies paid by tea buyers for purchases from January 1st to April 30th of this year, with a similar exemption applicable to dealers with direct sales contracts during the same period.
