KTDA opposes proposed 1% tea levy, urges MPs to protect smallholder farmers’ earnings
KTDA leaders caution that the proposed levy would reduce farmer incomes and undermine Kenya’s tea sector competitiveness.
KENYA – The Kenya Tea Development Agency (KTDA) has opposed a proposed 1% levy on tea sales, warning that the move would further strain smallholder farmers.
The levy, introduced under the Tea (Amendment) Bill, 2023, mandates farmers to remit one per cent of their tea earnings to the Kenya Revenue Authority (KRA).
KTDA National Chairman, Senior Counsel Chege Kirundi, raised the agency’s concerns while addressing the National Assembly Committee on Agriculture and Livestock Development on Friday.
He urged legislators to reconsider the proposal, citing the already heavy tax burden on tea farmers.
Kirundi said the main objective should be to maximise returns for smallholder farmers, who play a vital role in sustaining Kenya’s tea industry.
KTDA Chief Executive Officer, Wilson Muthaura, echoed the chairman’s sentiments, noting that the agency’s core mandate is to safeguard farmer income. “This industry thrives because of the resilience of our smallholder farmers,” Muthaura said.
“Our priority as KTDA is to protect their incomes and ensure that every shilling they earn from their tea translates to better livelihoods for their families.”
The Kenyan tea industry supports over 650,000 smallholder farmers and millions more across the value chain. It remains a top foreign exchange earner for the country.
Muthaura emphasized KTDA’s commitment to improving returns through better governance, sustainable practices, and innovation. He added that any policy measures should be aimed at empowering farmers, not increasing their financial burden.
He appealed to the committee to engage with stakeholders before implementing reforms that may negatively affect farmer productivity and revenue.
This development follows the recent introduction of a 4% Sugar Development Levy imposed on millers and importers by the Ministry of Agriculture.
The sugar levy is calculated based on the ex-factory price for locally produced sugar and the CIF value of imported consignments.
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