Consumers are set to pay more to buy sugar following the introduction of a new tax on the sweetener.
Consumers are set to pay more to buy sugar following the introduction of a new tax on the sweetener, which will take effect on February 1.
Agriculture Cabinet Secretary Aden Duale has gazetted the Sugar Development Levy Order, 2025. The legislation introduces the Sugar Development Levy (SDL) on both domestic and imported sugar at four percent of the value of the commodity.
The gazettement of the levy comes just three months after President William Ruto signed into law the Sugar Act 2024. The Act gave the Agriculture Cabinet secretary power to introduce the levy.
“There is hereby imposed a levy, as prescribed in Section 40 (1) of the Sugar Act, 2024, at the rate of four percent of the value for domestic sugar and four percent of CIF (Cost of Insurance and Freight) value on imported sugar,” said Mr Duale.
Local sugar millers are required to remit the levy to the Kenya Sugar Board (KSB), the regulator recently reintroduced through the Act, while the parastatal will collect the levy directly from sugar importers or its appointed agents.
“The levy shall be remitted to the board not later than the 10th day of the month following the month during which the levy shall become due,” he added.
The sugar levy will be used to run the operations of the KSB, Kenya Sugar Research Institute, price stabilisation for sugar growers, and infrastructure development in the sector.
The allocations from the Sugar Development Levy collections include 15 percent for factory development, 15 percent for research, 40 percent for cane productivity, 15 percent for infrastructure in sugar cane-producing regions, 10 percent for KSB administration, and five percent for farmers’ organisations.
The KSB was recently hived off the Agriculture and Food Authority where it was a directorate under the new Act.
The introduction of the levy is a blow to consumers and comes just a month after the government also raised the excise duty it collects on the sweetener.
The Tax Laws Amendment Act 2024 raised excise duty on imported sugar to 7.5 percent, up from five percent.
The new taxes will raise the cost of sugar, whose prices have dropped significantly over the past year due to increased local demand.
According to data from the Kenya National Bureau of Statistics, a kilogramme of sugar was retailing at an average price of Sh159.69 last December.
This marks a decline of 25.4 percent from an average price of Sh214.2 per kilogramme in December 2023, handing consumers a timely relief from the high prices.
