The Tea Board of Kenya (TBK) targets to collect Ksh 1.2 billion annually from the tea levy with the implementation of the Tea Regulations, 2026.
TBK Chief Executive Officer Willy Mutai said proceeds from the levy will be pooled in a stabilisation fund that will be used to run the board’s operations, equip tea factories, brand and market Kenyan tea.
“The levy will contribute towards improvement of tea growing areas roads, tea collection centres and other infrastructure that directly supports tea production, transportation and market access,” said Mutai.
Under the regulations, tea exports will attract a tea levy at the rate of 0.8pc
According to the board, it has integrated its systems with the Kenya Revenue Authority (KRA) to start deducting the tea levy from buyers.
The board insists it will continue with plans to introduce the levy on total sales despite protest from buyers including those from key markets, saying the sub sector needs capital injection to run administrative operations.
Mutai said buyers will bear the costs of the levy in a bid to shield small scale farmers from reduced earnings.
The regulator says it vacated its earlier decision to peg the levy at one shilling per kilo as a tax equality measure.
The levy is project to collect Ksh 1.2 billion annually with the funds consolidated in a stabilization fund.
“We are now discussing how the collected funds will be apportioned, especially the 50pc that will go towards the Income Stabilization Fund as required by law,” he added.
15pc of the funds will be used to run the board’s operations, with the remaining amount used to build infrastructure and equip and modernize tea factories in the country.
