Kenya moves to remove import tax on onions and potatoes

KENYA – The Kenyan government has announced plans to eliminate a tax on imported onions and potatoes that has contributed to rising food prices and strained relations with neighboring countries.

The 25% excise duty, introduced in 2023, was intended to protect local farmers but has instead led to more expensive groceries for consumers and sparked trade tensions within the East African Community (EAC).

Under the Finance Bill, 2025, the government aims to roll back the tax and restore smoother trade flows between Kenya and its neighbors, particularly Uganda and Tanzania.

“This repeal is about affordability and restoring harmony in the region,” said a senior official at the National Treasury, speaking on background.

The tax had an immediate effect on food prices. In early 2023, potatoes were selling at about US$0.73 per kilo. By March 2025, the average price had risen to US$0.86. The tax did not just hurt local shoppers.

It prompted Uganda and Tanzania to slap their own duties on Kenyan farm exports, escalating tensions and prompting a series of meetings among EAC leaders to resolve the issue.

Officials now say that removing the duty could lower prices and ease the pressure on household budgets. “We expect the price of onions and potatoes to drop once this proposal goes through. This is important for our citizens,” said an Agriculture and Food Authority (AFA) official familiar with the discussions.

However, not everyone is pleased. Local farmers worry that removing the tax could expose them to unfair competition from cheaper imports. “We’re not against trade, but we need a level playing field,” said Peter Kirui, a potato farmer in Nakuru County. “If the imports flood the market, we won’t survive.”

Trade policy and economic impact

The proposed change follows a pledge made by former Treasury Cabinet Secretary Njuguna Ndung’u during talks with other EAC finance ministers.

He had promised to review the levies to help ease growing trade tensions and align policies more closely with regional goals.

This announcement comes shortly after another major policy shift: the lifting of import levies on nuts and oil crops for companies operating within Export Processing Zones (EPZs) and Special Economic Zones (SEZs).

These changes, formalized in Legal Notice No. 26 and effective from April 17, 2025, apply to imports from all EAC member states.

“This move will reduce production costs and make fresh produce processing more competitive in both local and international markets,” said the Director General of the AFA.

Together, the proposed tax cut on onions and potatoes and the recent exemption for edible oil inputs show a wider shift in Kenya’s trade approach.

The government appears to be focusing on easing food costs and encouraging stronger regional ties, even as it weighs the concerns of local producers.

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