The Ministry of Agriculture projects to collect Sh1.38 billion from the newly tea export levy annually, raising the total taxes from the beverage to more than Sh1.4 billion.
The government expects to collect Sh40 million in tea import levy, raising the total revenue from tea taxes to Sh1.42 billion a year.
The Tea Levy Regulations, 2026 reintroduces a levy, payable only by tea exporters at 0.8 percent of the auction value or customs value for direct sales, and by tea importers at 100 percent of the import value per consignment of made tea.
The collection of Sh1.42 billion is based on 2023 export data, where 522.92 million kilos of tea was exported, generating Sh180.57 billion.
“Based on 2023 export data, the levy is projected to generate approximately Sh1.38 billion from export levy and Sh40 million from import levy, totaling Sh1.42 billion per annum,” the Ministry said in a report.
“Under the regulation, the funds would be invested into the tea sector. Sh710 million will go to the Farmer Price Stabilisation Fund, Sh284 million to research, Sh213 million to Tea Board of Kenya (TBK) operations and Sh213 million to county governments for infrastructure.”
The Tea Levy Regulations, 2026 reintroduced a statutory levy of 0.8 percent on exports and imports under the authority of Section 53 of the Tea Act, 2020.
The levy was previously in place as an ad valorem until 2016, when it was scrapped. Its abolition left the TBK and the Tea Research Institute without sustainable funding, causing a sharp decline in research, quality surveillance and market promotion.
“The levy is being restored to build a sustainable, industry-funded mechanism to invest in research, marketing, infrastructure and farmer price protection,” the ministry said.
“It 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 says the purpose of the 100 percent import levy is to shield Kenyan tea producers from the influx of cheap, low-quality imported tea from neighbouring countries.
“The fund framework ensures farmers are not wholly exposed to the volatility of the international commodity market, a protection they have lacked since the levy was abolished in 2026,” the ministry report said.
“The Price Stabilisation Fund (receiving 50 percent of levy revenue) is designed to act as a cushion when global tea auction prices drop below sustainable levels, provide supplementary payments to smallholder farmers to bridge the gap between market prices and target earnings and respond to climate events such as floods and drought that damage crop output and reduce farmer income.”
Under regulation 5 of the Tea Levy Regulations, 2026, some teas are exempted, including value-added tea packed in containers of 10kg or less, tea extracts and tea aroma products, and Kenyan teas processed for value addition in an Export Processing Zone.
