Tea Board of Kenya Defends 0.8% Tea Export Levy as Strategic Reform to Boost Market Expansion and Industry Growth

By Gedion Nzyoki - 

• The Tea Board of Kenya has defended the newly introduced 0.8% tea export levy, describing it as a long-term strategy to strengthen the country’s tea industry
• Industry officials say the levy will support key areas including market expansion, infrastructure development, research, and value addition in the tea sector
• The government and tea stakeholders have pledged continued engagement to ensure smooth implementation of the new regulations and improved competitiveness for Kenyan tea globally

Nairobi, Kenya | May 14, 2026 — The Tea Board of Kenya (TBK) has defended the implementation of the Tea Levy Regulations 2026, describing the new 0.8% export levy as a strategic investment mechanism aimed at strengthening Kenya’s tea industry rather than imposing a punitive tax burden on stakeholders.

TBK Chairman Ndungu Gathinji addresses the media alongside other tea sector officials during a press briefing at Tea House in Nairobi. Photo: (TBK Facebook).

Speaking during a media briefing on Thursday afternoon at the Tea House in Nairobi, Board Chairman Ndungu Gathinji said the regulations, which took effect on May 1, 2026, were developed under the Tea Act and are intended to enhance competitiveness, sustainability, and value addition within the sector.

The regulations, published under Legal Notice No. 56 in Kenya Gazette Supplement No. 82 of April 1, 2026, provide for a 0.8% levy on tea exports based on auction value or customs value in the case of direct sales. The Board clarified that reports circulating in sections of the media claiming the levy is 8% are inaccurate.

TBK noted that the levy framework includes targeted exemptions aimed at encouraging local processing and export diversification. These exemptions apply to value-added packaged teas not exceeding 10 kilograms, tea aromas and extracts, as well as tea processed within Export Processing Zones (EPZs) and Special Economic Zones (SEZs) intended for local consumption.

According to the Board, the measures align with the government’s Bottom-Up Economic Transformation Agenda, which prioritizes industrialization and higher-value exports.

“The levy is not intended to be a punitive tax measure on consumers. Rather, it is a strategic investment mechanism aimed at supporting the long-term sustainability and competitiveness of the tea industry,” Gathinji emphasized.

TBK stated that proceeds from the levy will support key areas including infrastructure development in tea-growing regions, market expansion, quality assurance systems, research and innovation, sustainability compliance, and the branding of Kenyan tea in global markets.

The framework also provides for infrastructure funds to be disbursed directly to tea-growing county governments as conditional grants based on production levels. Counties, in consultation with stakeholders, will prioritize projects such as feeder roads and tea buying centres to improve efficiency within the tea value chain.

The Board further confirmed that the regulations were developed through extensive stakeholder engagement between 2021 and 2025, involving farmers, processors, exporters, brokers, warehouse operators, county governments, and industry associations.

Representing tea traders during the briefing, William Oyosi welcomed the levy, saying industry players expect it to support market diversification and the development of shared infrastructure.

He cited plans to establish a common user facility in Mombasa to support tea consolidation, value addition, and packaging for export markets, alongside increased investment in tea research.

Government Push for Global Market Expansion

Representing the Ministry of Investment, Trade and Industry, Mr. Michael Mandu highlighted ongoing efforts to expand Kenya’s tea market access through negotiated trade frameworks covering regions including the European Union, the United Kingdom, the United Arab Emirates, China, the African Continental Free Trade Area (AfCFTA), and the United States.

He noted that although market opportunities are expanding significantly, limited funding for trade missions and international buyer engagement has hindered the country’s ability to fully exploit those opportunities.

“We are committed to pushing Kenyan tea and other products into global markets so that farmers benefit from foreign exchange earnings generated abroad,” Mandu said.

The Board reaffirmed that Kenyan tea continues to enjoy a strong global reputation for quality, with the Mombasa Tea Auction remaining the largest tea auction in the world and a major trading hub for regional and international tea markets.

TBK also reiterated its commitment to continued stakeholder engagement to ensure smooth implementation of the levy regulations and to address concerns raised by industry players and international buyers.

An Inside Look at the Tea (Levy) Regulations 2026

The Tea (Levy) Regulations 2026, enacted under Section 53 of the Tea Act, 2020, and published through Gazette Notice No. 82 of April 1, 2026, introduce a comprehensive financing framework intended to strengthen the sustainability, competitiveness, and growth of Kenya’s tea sector.

Under the regulations, a levy of 0.8% is charged on the auction value of tea or the customs value in the case of direct exports. The levy is payable at the point of export.

Imported made tea is also subject to a levy equivalent to 100% of the import value for every consignment. Responsibility for payment falls on exporters and importers, meaning tea farmers are not directly charged, although the cost is ultimately absorbed within the consumer market.

Funds generated through the levy will support critical industry priorities outlined in the Tea Act, 2020. Half of the revenue will go toward income and price stabilization initiatives for tea growers, while 20% will fund research activities. Infrastructure development will receive 15%, with the remaining 15% allocated to strengthening regulation and oversight within the sector.

The regulations also seek to expand Kenya’s tea market presence globally by supporting market diversification efforts targeting regions such as China, West Africa, Russia and CIS countries, North America, and parts of Asia.

Plans are also underway to establish tea warehousing and distribution hubs in strategic markets including the Democratic Republic of Congo (DRC), the United Arab Emirates (UAE), Ghana, and China.

Another key focus of the framework is promoting value addition to reduce overreliance on bulk tea exports. The regulations encourage the production and export of packaged, branded, and specialty teas while enhancing research capacity aimed at improving tea quality and diversifying tea products.

In addition, the regulations are designed to strengthen governance and accountability within the tea industry by addressing challenges such as irregular green leaf trading, counterfeiting of premium tea brands, governance weaknesses, and the exploitation of tea farmers.

To encourage local processing and manufacturing, the regulations provide exemptions for value-added teas packaged in containers not exceeding 10 kilograms, tea extracts and aromas, and Kenya tea processed within EPZs and SEZs for local consumption. The exemptions are expected to support domestic value addition and strengthen Kenya’s position in the global tea market.

Call for Constructive Engagement

TBK has urged continued collaboration between the government, industry stakeholders, and the media, emphasizing the importance of accurate and balanced reporting on tea sector reforms.

The Board concluded that the success of the Tea Levy Regulations 2026 will depend on transparency, stakeholder cooperation, and sustained investment in strengthening Kenya’s tea value chain for long-term economic growth.