The Tea Levy Regulations, 2025, under section 53 of the Tea Act, 2020, establish a new levy system signed by the Cabinet Secretary for Agriculture and Livestock Development, Mutahi Kagwe.
An announcement on the changes to the tea levy for 2026 was made by the CS on April 2, following his April 1 announcement on the Tea Levy Regulations, 2026.
According to the CS, the changes in the levy were aimed at reforming the target to Sh100 per kg green leaf by 2027.
“The Government is in the process of implementing a raft of measures in the tea industry in a bid to double smallholder farmers’ earnings to Sh. 100 per kilo of Greenleaf by the year 2027,” Mutahi Kagwe stated during the release of the 2025 Kenya Tea Industry Performance Report at the Rukuriri Tea Factory in Embu County.
During his announcement, the CS further explained that imposing restrictions on the payment of the levy at the ports of import and export would ensure that low-quality tea does not enter the Kenyan market.
Additionally, the CS argued that the levy implementations were consumer-friendly and would not create any financial burden to small-scale farmers.
However, the rollout of the 0.8% levy on exports from 1% and the 100% levy on imports, which were to take effect on May 1, has not been gazetted despite the 30-day gazettement deadline.
With the rollout, the Kenya Revenue Authority (KRA) is set to collect the 0.8% export levy on tea shipments on behalf of the Tea Board of Kenya.
Tea Levy Rates
For any tea sold through action, the new levy applies a 1% charge to the auction value.
However, if the tea being sold is blended with non-Kenyan portions, the 1% levy applies only to the customs value of the Kenyan tea component.
Every consignment of non-Kenyan tea will be required to pay 100% of the import value.
Further, the 100% rate applies to tea diverted from export processing zones (EPZs) and special economic zones (SEZs), as well as to tea auctioned into the Kenyan domestic market.
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Levy Payment
At the point of export and import, traders will be required to declare the items being traded using official TBK forms.
Exporters will use the TBK/TL/1 form, while the importers will use the TBK/TL/2 form.
The Tea Board of Kenya, or its authorized agent, will be the primary and official collector of the levies and the issuer of proof of payment.
Failure to provide a TBK/TL/3 form as proof of payment will be considered non-compliance.
If the TBK did not collect the levy directly, the authorized agents must remit the funds to TBK by the 30th day of the following month.
Value-added tea exports of packed tea bags and instant tea sold in retail packs of 10kg or less will be exempted from the new tea levy.
Additionally, Kenyan tea that is value-added within EPZs and SEZs and consumed in the domestic market will also be exempted from the levy.
Non-payment and false declarations, as well as offenses under Section 71 of the Tea Act, will be penalized, and unpaid levies will be recovered as civil debts.
Interest charges will be applied to unpaid levies at the Central Bank rate after 30 days, according to TBK.
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Funds Allocation
50% of the total levy collected will be used for income and prize stabilization for the tea farmer.
Additionally, 20% will be remitted to the Tea Research Institute (TRI) for research and development.
To support the regulatory function of the TBK, 15% of the levy will be used to maintain the operations.
Infrastructural developments in the tea catchment areas, managed in consultation with tea-growing countries, will be allocated 15% of the tea levy.
