Kenya introduces 4% sugar development levy to revive local industry
The new levy aims to support cane development, factory rehabilitation, and infrastructure in Kenya’s struggling sugar sector.
KENYA – Kenya has announced the implementation of a 4% Sugar Development Levy (SDL) on all sugar produced and imported, effective July 1, 2025.
The Ministry of Agriculture confirmed the levy as part of the government’s broader strategy to rejuvenate the country’s declining sugar industry.
Under the new regulation, domestic sugar will attract a 4% levy based on the ex-factory price, while imported sugar will incur a 4% charge on its cost, insurance, and freight (CIF) value.
All millers and importers will be required to remit the levy by the 10th day of the month following the sale or importation of sugar.
The Kenya Revenue Authority (KRA) has been designated as the official collection agent and is expected to issue detailed guidelines on the payment and compliance procedures.
The levy was introduced following the gazettement of the Sugar Development Levy Order, 2025, under Section 40 (1) of the Sugar Act, No. 11 of 2024.
According to the Ministry of Agriculture, funds raised through the SDL will be channelled into strengthening sugar sector infrastructure, supporting research, and enhancing farmer welfare.
Agriculture Cabinet Secretary Mutahi Kagwe emphasized the government’s intention to ensure the long-term sustainability of the industry.
Stakeholders have, however, raised concerns over the potential impact on consumer prices. Millers and industry representatives caution that the added cost could lead to higher sugar prices in the retail market.
As outlined in the Sugar Act, 2022, 40% of the levy collections will be dedicated to cane development. An additional 15% will support the rehabilitation of deteriorated state-owned factories.
Another 15% will be allocated to infrastructure development in sugarcane-producing regions, based on production capacity.
The Kenya Sugar Board will receive 10% of the funds for administrative functions, while sugarcane farmer associations are allocated 5%. The Kenya Sugar Research Training Institute will receive 15% to enhance research and training within the sector.
“These investments are designed to secure the long-term sustainability of the sugar industry,” said Kagwe.
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