Agriculture Cabinet Secretary Mutahi Kagwe has said the government has factored in key tax incentives in the 2025/2026 Finance Bill as part of its plans to reform the sector.
Among planned incentives targeting tea sector include removal of excise duty on tea packaging materials and the elimination of VAT on value-added tea exports.
“These measures will make it more affordable for our factories and processors to package and export value-added,” said Kagwe.
Kagwe who spoke at Gacharage Tea factory in Murang’a during celebrations to mark International Tea Day underscored the contribution of tea in the country’s economy saying the set reforms will boost the sector and especially increase farmers’ returns.
“Tea is not just a beverage, it is a cornerstone of our economy, sustaining rural livelihoods and communities,” he stated.
Kagwe emphasized that the crop supports over 650,000 smallholder farmers and contributes nearly a quarter of the country’s foreign exchange earnings.
The government is also supporting direct tea sales, which is expected to allow producers to negotiate directly with international buyers.
Kagwe encouraged smallholder tea factories to invest in value addiction, to diversify into flavoured herbal and instant and specialty teas and build strong Kenyan brands that command premium prices globally.
KTDA Chairman Chege Kirundi echoed the government’s commitment on tea reforms and emphasized the agency’s focus on farmer empowerment.
He outlined KTDA’s initiatives to promote grassroots-level value addition through specialty tea production, farmer-owned branding, and the creation of new tea-based products.
“We are turning farmers into entrepreneurs, giving them ownership not just of their farms but of their brands and markets,” he said.
