Inside Kenya’s New Tea Levy and What It Means for the Industry
Kenya’s tea industry could soon operate under a new funding model after the Tea Board of Kenya proposed changes to the country’s export levy during deliberations on the Tea (Amendment) Bill, 2023.
The proposal, presented to the National Assembly Departmental Committee on Agriculture and Livestock, seeks to lower the statutory export levy while redirecting more resources towards research, market development, regulation, and infrastructure. Industry stakeholders believe the move could strengthen one of Kenya’s largest export sectors and improve its global competitiveness.
A New Approach to the Tea Levy
The proposal comes after years of legal disputes following the enactment of the Tea Act, 2020. In a major breakthrough, key industry players, including the Kenya Tea Development Agency (KTDA) and the East African Tea Traders Association (EATTA), reached an out-of-court mediation agreement on a new financial framework.
At the centre of the agreement is a proposal to reduce the statutory export levy from 1 percent of the auction value to 0.8 percent of the bulk export value.
Although the levy rate will be lower, Kenya’s strong export performance means it will continue generating substantial revenue for the sector. In 2025, the country exported 594 million kilograms of tea, earning KSh182 billion. Based on those figures, the revised levy would generate an estimated KSh1.3 billion annually.
Supporters say the new structure strikes a balance between reducing costs for exporters and maintaining sustainable funding for the industry.
Where the Levy Will Be Invested
The proposal also changes how levy collections will be distributed.
Instead of maintaining the Tea Stabilization Fund, the industry plans to channel the funds into four strategic areas that directly support growth and competitiveness.
Under the proposed model, 40 percent of the levy will finance the Tea Board’s regulatory functions. Another 30 percent will support the Tea Research Foundation to drive innovation, improve productivity, and strengthen research.
A further 20 percent will fund market development and international branding to help Kenyan tea expand its global footprint. The remaining 10 percent will finance infrastructure projects in tea-growing regions based on production levels.
Industry leaders believe these investments will help address funding gaps while positioning Kenyan tea more competitively in international markets.
Why the Changes Matter
Tea remains one of Kenya’s biggest foreign exchange earners and supports millions of livelihoods across the country.
A stronger investment in research could help farmers improve yields and respond to climate challenges. Increased funding for global marketing may also create new export opportunities, while better infrastructure could improve efficiency across the tea value chain.
At the same time, stronger regulatory funding is expected to enhance oversight and maintain the quality standards that have made Kenyan tea one of the most recognised brands globally.
What Happens Next?
The National Assembly will continue considering the Tea (Amendment) Bill, 2023 before deciding whether to approve the proposed levy changes.
If lawmakers adopt the proposal, Kenya’s tea sector will shift to a new funding model designed to strengthen research, regulation, infrastructure, and market development while lowering the export levy.
For an industry that contributes billions of shillings to the economy every year, the proposed levy represents more than a tax adjustment. It could shape how Kenya invests in the future of one of its most valuable agricultural exports.
