The government has waived taxes on tea packaging materials to cut costs during value addition, the Ministry of Agriculture has announced.
Tea, a major income earner for Kenya, will now be sold at relatively lower prices, as the government rolls out the tax waivers as announced by Agriculture CS Mutahi Kagwe.
Kagwe said the move will help boost productivity and help raise income for local farmers
"The government is keen on revitalising the tea sector to boost productivity and raise farmers' incomes through value addition. In a move aimed at lowering production costs, the government has waived taxes on packaging materials, a major contributor to high costs on value addition,'' read part of a statement by the Ministry of Agriculture.
Kagwe made the announcement during a consultative meeting in Kericho with chairpersons of Kenya Tea Development Agency (KTDA)-managed smallholder tea factories from in Rift Valley region. During the meeting, Kagwe reaffirmed the government’s commitment to supporting the tea sector.
Meanwhile, Kagwe assured stakeholders that international markets for Kenyan tea remain available, urging farmers to focus on producing high-quality tea.
He also noted that top-grade tea, defined by the standard "two leaves and a bud," fetches better returns in global markets.
To further support farmers, Kagwe announced that his ministry will collaborate with county governments to strengthen agricultural extension services.
To achieve this, the government has already enrolled an ongoing initiative to train agripreneurs who will conduct farm visits and guide farmers on soil health, crop husbandry, good farming practices, use of inputs, and value addition techniques.
Kenya's tea sector has undergone sectoral policy policy reforms, with Kagwe indicating that all the 142 factories in Kenya will receive a license allowing them to directly sell and export to international markets.
Currently, Kenya mainly exports its tea through auctions such as the Mombasa Tea Auction, where exporters or buyers bid for lots. Tea is normally exported in standardised bulk units (usually 50kg paper sacks or fiberboard boxes lined with aluminium foil or polythene).
In 2024, tea exports reached Sh215 billion, with Sh181 billion attributed to exports. Kenya exported tea to 96 countries in 2024, with the top destinations being Pakistan with 206.27 million kgs (Sh70 billion), Egypt at 86.90 million kgs (Sh23.96 billion and the UK 57.44 million kgs (Sh17 billion).
Other Kenyan tea destinations included the United Arab Emirates with 30.50 million kgs (Sh10.27 billion) and Yemen with 22.69 million kgs (Sh9.11 billion). These top five markets accounted for approximately 81 per cent of Kenya's tea exports.
