Tea Board rolls out new levy framework to boost farmers and infrastructure

The Tea Board of Kenya (TBK) has started implementing the Tea (Levy) Regulations, 2026, in a move expected to strengthen infrastructure development in tea-growing regions and improve support for farmers across the country.

The regulations, published under the Tea Act (CAP 34), establish a legal framework for the collection and utilization of tea levy funds aimed at improving roads, tea collection centres, and other infrastructure supporting tea production and transportation.

Speaking during a media sensitization forum on the reforms, TBK Chief Executive Officer Willy Mutai said the board remains committed to policies that enhance the competitiveness, sustainability, and profitability of Kenyan tea in global markets.

“The levy will contribute towards improvement of tea-growing area roads, tea collection centres, and other infrastructure that directly supports tea production, transportation, and market access,” said Mutai.

Focus on Infrastructure and Farmer Support

According to TBK, the levy funds will help address logistical and transport challenges that have continued to affect tea farmers and factories in producing regions.

Mutai noted that the tea sector remains one of Kenya’s most important economic pillars, supporting millions of livelihoods while contributing significantly to foreign exchange earnings and rural economic growth.

He said the reforms are intended to promote accountability, transparency, and efficient management across the tea value chain while safeguarding the country’s position as a leading tea exporter.

“The successful implementation of these reforms requires public understanding and confidence from investors and tea industry players. This is why the role of journalists and editors is extremely important,” he said.

Levy Reduced After Stakeholder Consultations

TBK revealed that the initial proposal for a one percent tea levy was revised downward to 0.8 percent following consultations with industry stakeholders.

Mutai explained that discussions are ongoing regarding the allocation of the collected funds, including the 50 percent earmarked for the Income Stabilization Fund as provided for under the law.

“We are now discussing how the collected funds will be apportioned, especially the 50 percent that will go towards the Income Stabilization Fund as required by law,” he said.

He emphasized that the levy is designed to directly benefit tea farmers, noting that buyers of Kenyan tea will contribute to the fund, creating a new financial support mechanism for the sector.

“This is money that was not coming into the tea industry before. It is a major boost for farmers because they will now have a dedicated fund for their benefit,” Mutai added.

Push for New Export Markets

TBK also announced plans to expand export opportunities for Kenyan tea despite ongoing global economic and geopolitical challenges.

According to Mutai, Kenya increased its tea export destinations from 96 to 100 countries last year as part of efforts to diversify markets and strengthen trade resilience.

He dismissed concerns that the 0.8 percent levy could reduce Kenya’s competitiveness, pointing to several tax incentives introduced by the government to support the industry.

The measures include the removal of 16 percent VAT on tea packaging materials, value addition, and factory door sales to encourage local packaging and boost exports.

Mutai said the reforms have already attracted interest from multinational firms seeking to establish tea packaging operations in Kenya.

Kenya Targets Greater Global Competitiveness

The board is also encouraging investors to take advantage of incentives available in Export Processing Zones (EPZs) and Special Economic Zones (SEZs), which offer tax benefits for up to 15 years.

At the same time, Kenya is pursuing negotiations aimed at securing zero tariffs for Kenyan tea exports to China in a bid to expand market access.

“Kenyan tea remains one of the best in the world. Through strong partnerships, sound regulation, and informed communication, we can collectively safeguard and grow this important national asset,” Mutai said.

Tea Sector Remains Key Economic Pillar

The tea subsector continues to play a major role in the realization of Vision 2030 and the Bottom-Up Economic Transformation Agenda (BETA).

The industry supports more than 800,000 farmers, contributes about two percent of Kenya’s Gross Domestic Product, and accounts for four percent of agricultural GDP.

Kenya is currently the world’s third-largest tea producer and the leading exporter of Black CTC tea, accounting for approximately 24 percent of global tea exports.

Last year, the sector generated Sh181.91 billion in export earnings, with a total marketed value of Sh218.79 billion.