Kenya Tea Board targets US$9.3M annual levy collection under new Tea Regulations 2026 

KENYA – Tea Board of Kenya is targeting annual collections of Kes1.2 billion (US$9.298M) from a new tea export levy under the Tea Regulations, 2026, as the regulator moves ahead with plans to strengthen funding for Kenya’s tea industry. 

Tea Board of Kenya Chief Executive Officer Willy Mutai said the levy proceeds will be channelled into a stabilisation fund aimed at supporting operations across the tea value chain, including infrastructure development, factory modernisation and global marketing of Kenyan tea. 

“The levy will contribute towards improvement of tea growing areas roads, tea collection centres and other infrastructure that directly supports tea production, transportation and market access,” said Mutai. 

Under the Tea Regulations, 2026, tea exports will attract a levy of 0.8 percent. The regulator said it has already integrated its systems with the Kenya Revenue Authority to facilitate automatic deductions from tea buyers. 

The board said the levy will be charged on total tea sales, despite growing protests from tea buyers and stakeholders in key export markets. According to Mutai, buyers will absorb the levy costs to shield small-scale farmers from lower earnings. 

The regulator also confirmed it had abandoned an earlier proposal to impose a flat rate of one shilling per kilogram as part of efforts to create a fairer taxation structure. 

“We are now discussing how the collected funds will be apportioned, especially the 50pc that will go towards the Income Stabilization Fund as required by law,” Mutai added. 

According to the board, 15 percent of the levy collections will support its operations, while the remaining funds will finance infrastructure projects, equip tea factories and support modernization initiatives across the sector. 

However, the planned implementation has sparked concern among traders and exporters, with some stakeholders questioning the legality of enforcing the levy before the issuance of a formal gazette notice. 

Industry players argue that introducing the levy without gazettement undermines due process and creates uncertainty within the tea market. 

Amid the backlash, Mutahi Kagwe defended the levy, saying it is necessary to protect Kenya’s tea identity and strengthen the country’s global tea branding efforts. 

“Parliament passed this levy for a reason. Kenyan tea is globally known, but in many markets, there are no geographical indicators to show it is Kenyan tea. Some countries are selling Kenyan tea as their own. That is exactly why they are opposing this levy,” Kagwe told the National Assembly Departmental Committee on Agriculture and Livestock. 

Kagwe said the levy was intended to create sustainable funding for marketing, branding and modernization within Kenya’s tea sector. 

Official data shows tea exports increased from 626.6 million kilograms in 2024 to 653.7 million kilograms in 2025, although earnings declined from Kes189 billion (US$1.46B) to Kes187 billion (US$1.45B) over the same period. 

Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.