A farmer picking tea in Murang'a.
MPs from tea-growing regions in the country are demanding the suspension of a new export levy on Kenyan tea, saying farmers face losing up to Sh5 billion annually as buyers opt for other markets.
The lawmakers argue that the continued imposition of the new 0.8 percent levy by the Tea Board of Kenya (TBK) on all teas destined for export markets risks making Kenyan tea more expensive relative to competing markets.
The concern comes after TBK on May 1, 2026 rolled out the levy on all teas destined for export markets triggering fears across the tea value chain.
The development followed the introduction of the Tea (Levy) Regulations, 2026, which imposes a levy equivalent to 0.8 percent of the auction value or customs value for direct sales on all tea exports. TBK has tapped the Kenya Revenue Authority (KRA) as the collecting agent for the levy.
Led by Kirinyaga Senator James Murango, the legislators said the country has lost more than Sh3.1 billion in expected sales in the past weeks since the inception of the levy with over 9,000 tonnes of tea lying unsold in Mombasa.
The MPs now want the levy suspended to allow for consultations or they will move to court to force the government into action.
“Why the rush? It does not make sense. If we don’t remove the levy, then we will be left with no market,” said Senator Murango. “Should the government not suspend the levy to allow for talks, we will be left with no option but to go to court to make sure the regulations are withdrawn.”
The National Assembly in a past session.
The levy as stated in the Tea Levy Regulations, 2026, under section 53 of the Tea Act, 2020, excludes transit tea from other six countries, which trade at the Mombasa auction.
Already, traders at the Mombasa Tea Auction are shifting to teas from other East African producers, with the buyers preferring Rwandan and Burundian tea.
Pakistan, Kenya’s biggest tea export market, has also protested against the levy and called for its immediate suspension. The Pakistan Tea Association said the levy would raise import costs by about three US cents per kilogramme.
Senator Murango said tea factories have started feeling the pinch of the impact of the levy with sales of premium tea at the Mombasa auction dropping as buyers opted for cheaper alternatives.
He said that in the latest auction, tea factories East of the Rift Valley – producers of hand-picked premium tea – have recorded dramatic fall in sales (only 55 percent sold). Those from the West (recording 88 percent sale) have had a jump as the buyers opt for low quality tea, which they buy in bulk and then blend with the premium stock.
“Rukuriri Tea Factory, usually selling between Sh70 and Sh90 million at a single auction, sold just Sh2 million. The same was recorded by Kimunye, Imenti, Makomboki and Kiegoi, among others,” said Mr Murango.
“We are killing the tea that fetches top foreign exchange for political expediency. You cannot stabilise prices if no one is buying the tea.”
He said the levy will affect final payment of farmers’ bonuses and the quantity of Kenyan unsold tea will increase.
Tea remains one of Kenya's leading foreign exchange earners earning Kenya Sh218.7 billion in 2025.
“The cost will be transferred to the farmers through less income on tea returns as the buyer will now opt for cheap tea instead of the premium tea.”
Stakeholders in the tea sector had also expressed concerns that exporters may pass the levy cost to farmers by lowering auction prices.
A farmer picking tea in Murang'a.
Nominated Senator Joyce Korir pointed out that tea is one of the cash crops in this country and that it was high time the Agriculture ministry sat with the relevant stakeholders and gave a lasting solution.
The National Assembly’s Committee on Delegated Legislation Committee Vice Chairperson Gichimu Githinji said farmers needed proper information on the intended benefits of the levy.
However, the TBK has maintained that the levy will not reduce farmers’ earnings as it will be paid by tea exporters and not producers. The levy is projected to generate Sh1.42 billion annually based on export and import volumes, and all funds will be reinvested in the tea value chain.
The authority said that the fund is designed to stabilise prices, improve research, strengthen regulation, and support infrastructure development across Kenya’s tea-growing regions.
From the money collected, 50 percent of the revenue collected will be channelled into a tea price stabilisation fund aimed at protecting farmers from market fluctuations and improving their returns.
Another 20 percent will support research and development through the Tea Research Institute, 15 percent to support regulatory function of TBK and 15 percent for infrastructural development in the tea catchment areas.
A 2016 taskforce recommended the removal of the levy and Senator Murango claims the charge has now been re-introduced through the backdoor.
He explained that the regulations were passed before the enactment of the Tea (Amendment) Bill, 2023 – still before the National Assembly – that would have been the basis of the regulations.
“This problem has been brought about by two committees of Delegated legislation of the Senate and the National Assembly who have gone to bed with the Executive,” said the former Senate Agriculture committee chairperson.
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