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Tea Board Defends Proposed 0.8% Tea Levy Before Parliamentary Committee
The Tea Board of Kenya has proposed reducing the tea export levy as part of efforts to strengthen the industry’s long-term sustainability, improve competitiveness, and ensure better funding for critical sector priorities.
The proposal was presented to the National Assembly Departmental Committee on Agriculture and Livestock during deliberations on the Tea (Amendment) Bill, 2023. The committee is chaired by Hon. (Dr.) John Mutunga.
According to the Board, the proposed levy structure will create a more sustainable funding model while supporting research, market expansion, regulation, and infrastructure development across Kenya’s tea-growing regions.
Tea Board Defends Proposed 0.8% Tea Levy Before Parliamentary Committee
Lower Levy, Better Funding
The proposal follows an out-of-court mediation between key industry players, including the Kenya Tea Development Agency (KTDA) and the East African Tea Traders Association (EATTA), after years of legal disputes surrounding the Tea Act, 2020.
Under the new proposal, the statutory export levy will reduce from 1 percent of the auction value to 0.8 percent of the bulk export value.
Although the levy rate will decline, the new structure aims to improve how the funds are utilized.
Kenya exported 594 million kilograms of tea in 2025 and earned KSh182 billion in export revenue. Based on those figures, the revised levy would generate an estimated KSh1.3 billion annually.
Levy to Support Research, Marketing and Infrastructure
The proposal also introduces a new formula for distributing the levy.
Instead of allocating funds to the Tea Stabilization Fund, the industry plans to channel the entire amount into four priority areas.
The Tea Board of Kenya will receive 40 percent of the collections to strengthen regulation and oversight. The Tea Research Foundation will receive 30 percent to drive research, innovation, and higher productivity.
Another 20 percent will support market development and international branding to expand Kenya’s global tea footprint. The remaining 10 percent will finance infrastructure projects across tea-growing regions based on production levels.
Industry stakeholders believe the new levy model will address funding gaps while making Kenya’s tea sector more competitive in international markets.
Supporting Long-Term Growth
The Tea Board says the proposed levy changes will strengthen governance, improve accountability, and provide predictable funding for programmes that directly benefit the tea value chain.
The Board believes the revised framework will help farmers, processors, exporters, and other stakeholders by directing more resources toward research, regulation, infrastructure, and market expansion.
If Parliament approves the proposal, the new levy structure could reshape how Kenya finances one of its largest export industries while supporting its long-term growth and global competitiveness.
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