BY DENNIS GICHUIRI
The Tea Board of Kenya has defended the newly introduced Tea Levy Regulations 2026, saying the move is aimed at strengthening the tea sector, improving infrastructure in tea-growing regions and supporting farmers through an income stabilisation fund.
Speaking during a media sensitisation meeting in Nairobi, Tea Board of Kenya Chief Executive Officer Willy Mutai said the regulations provide a legal framework for the imposition, collection and utilisation of tea levies to support the sustainability and competitiveness of Kenya’s tea industry.
Mutai said the levy would fund the development of tea roads, collection centres and other infrastructure critical to tea production and transportation.
“The Tea Levy Regulations 2026 are part of the tea reforms. The regulations provide a clear legal framework for the imposition, collection and utilisation of the tea levy to support infrastructure development within tea-growing areas,” said Mutai.
He noted that the tea sector remains one of Kenya’s most strategic agricultural value chains, supporting millions of livelihoods and generating significant foreign exchange earnings for the country.
According to the CEO, the levy will also help expand Kenya’s tea market access globally and improve returns to farmers through a stabilisation fund that will cushion growers during periods of depressed tea prices.
Mutai disclosed that the government expects to collect approximately Sh1.2 billion annually from the 0.8 per cent levy, with 50 per cent of the funds directed to the farmers’ income stabilisation kitty.
“This is money that was not coming in for the longest time in the existence of the tea industry. The consumer is paying that premium price and the money is going back to the farmer,” he said.
The Tea Board boss dismissed criticism from some stakeholders and international buyers who argued that the levy could make Kenyan tea uncompetitive in global markets.
He maintained that the levy was minimal compared to the retail value of Kenyan tea abroad and accused some foreign buyers of exploiting Kenyan farmers by purchasing tea cheaply before reselling it at significantly higher prices.
“You buy one kilo of Kenyan tea at about two or three dollars and export it at 24 dollars. We need to ensure our farmers also benefit from the value of their product,” said Mutai.
Mutai also responded to concerns raised by Pakistan-based tea buyers over the levy, saying Kenya had followed proper legal and diplomatic procedures in implementing the regulations.
He revealed that the matter had been referred to the Ministry of Foreign Affairs and discussions would continue through bilateral trade engagements between Kenya and Pakistan.
The CEO further argued that Kenya’s tea industry enjoys one of the most favourable tax regimes in the country, claiming that previous reports alleging excessive taxation in the sector were based on misinformation.
“Tea is one of the few products in Kenya with almost zero taxation. What some people have been calling taxes are operational licences and statutory requirements applicable across industries,” he said.
Mutai added that the government had already removed several charges affecting the sector, including VAT on packaging materials and taxes on tea sold directly from factories.
He said the reforms had already attracted multinational investors interested in packaging and value addition within Kenya.
The Tea Board of Kenya reiterated its commitment to transparency and stakeholder engagement, urging the media to continue supporting public awareness and informed discourse on reforms in the tea sector.
“We encourage the media to continue telling the positive story of Kenya tea while supporting informed public discourse on sector opportunities and reforms,” said Mutai.
