Traders at the Mombasa Tea Auction are shifting to teas from other East African producers after the Kenyan government began implementing an 0.8 percent levy on home made produce.

This week, dealers focused more on Rwandan and Burundian tea with Kenya Tea Development Agency (KTDA), which handles more than 60 percent of the produce traded in the auction paying more than $3,461 (Sh450,000) in the period.

On May 1 2026, the Kenya Revenue Authority (KRA) began collecting an 0.8 percent upfront export levy on tea shipments on behalf of the Tea Board of Kenya, a fee which has made Kenyan tea most expensive at the sale.

The levy is applicable to only Kenyan tea and has disrupted business at the auction, with buyers such as Pakistan, one of the major Kenyan markets, protesting and calling for its immediate suspension.“In the first week of the implementation, we have seen business shift to other countries’ teas since Kenyan tea is becoming expensive. The levy as stated in the Tea Levy Regulations, 2025, under section 53 of the Tea Act, 2020 excludes transit tea from other six countries which trade at the Mombasa auction,” said East Africa Tea Trade Association managing director George Omuga.“We have scheduled a meeting with the Agriculture Cabinet Secretary Mutahi Kagwe to address the issue since it will negatively affect Kenyan tea and farmers income.”Mr Omuga said the problem is compounded by disruption of vessels flow causing delays in exports meaning those who bought tea as early as January but were delayed by the global sea transport disruptions, were slapped with the levy.

According to the regulations, all levies must be paid before the tea is shipped out.

And all agents at the point of export and import and traders will be required to declare the items using official TBK forms.“Exporters will use the TBK/TL/1 form, while the importers will use the TBK/TL/2 form. The TBK, or its authorised 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,” read the regulation.

Tea Buyers Association chairman Peter Kimanga said the rules will affect final payment of farmers’ bonuses and the quantity of Kenyan unsold tea will definitely increase in the coming weeks.

“This year won’t be good for tea farmers as the transportation cost as a result of Middle East conflicts forces us to use longer routes at higher prices. Now with the introduction of the 0.8 percent levy, this will have to be deducted from farmers’ returns. At the moment, we pay about Sh80,000 per container as levy for export which is paid upfront,” said Mr Kimanga.

Mr Kimanga also said Pakistan had protested against the levy which will in turn affect Kenyan tea.“The levy does not affect other countries tea but Kenyan tea, this means, buyers will opt for other countries tea since Kenyan tea, though it's of good quality but it will turn out to be expensive,” said Mr Kimanga.

According to the CS Kagwe, 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.

As TBK plans to collect billions of shillings, the regulations states that of the total levy collected, 50 percent will be used for income and prize stabilisation for the tea farmer.

Additionally, 20 percent will be remitted to the Tea Research Institute (TRI) for research and development.

To support the regulatory function of the TBK, 15 percent 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 percent of the tea levy.

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