Speaking amid growing concerns from tea exporters and sections of farmers, Kagwe said the levy is part of broader reforms aimed at reviving the sector, boosting global competitiveness and shielding local farmers from unfair market practices.
The government maintains that the levy will not be deducted directly from farmers’ earnings but will instead be charged at the export and import stages.
Under the Tea (Levy) Regulations, 2026, exporters are required to pay a levy equivalent to 0.8 percent of the auction value or customs value for direct tea sales. Imported tea will also attract a 100 percent levy on the import value of every consignment of made tea.
According to the Tea Board of Kenya, the funds collected will be used to finance tea marketing, infrastructure development, research, and regulation of the sector.
Kagwe argued that Kenya must act decisively to protect the identity and quality of Kenyan tea in international markets.
He noted that low-quality imported tea and counterfeiting have continued to hurt the reputation of Kenya’s globally recognized tea products.
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The CS further emphasized that 50 percent of the levy proceeds will go toward stabilizing tea prices and farmers’ incomes, while additional allocations will support research, infrastructure upgrades, and stronger oversight of the tea value chain.
Government officials say the reforms are expected to strengthen Kenya’s position in emerging markets such as China, West Africa, the Middle East, and North America.
Kagwe also revealed that the government is pursuing aggressive value-addition measures to ensure more Kenyan tea is exported in branded and packaged form instead of bulk exports.
He recently urged tea processors to package tea locally, saying it would create jobs and increase farmer profits.
In addition, the government has waived taxes on packaging materials in a move aimed at reducing production costs for tea factories and encouraging local value addition.
Kagwe said the Ministry will also work closely with county governments to strengthen agricultural extension services and train agripreneurs to help farmers improve tea quality and farm productivity.
Despite the government’s assurances, some exporters and stakeholders remain skeptical, warning that the new levy could increase operational costs and affect Kenya’s competitiveness in the global market.
However, the ministry insists the reforms are necessary to secure the future of the tea sector and guarantee better returns for smallholder farmers.
