The Kenya Revenue Authority (KRA) has issued guidelines for the collection of Sugar Development Levy that came into effect on July 1, 2025.
The move follows Agriculture Cabinet Secretary Mutahi Kagwe's designation of the Revenue Authority as the collector of the levy imposed through Legal Notice 113 of 2025.
In a notice issued on Thursday, July 31, KRA noted that for local millers, the levy would be payable at the rate of 4 per cent of the ex-factory price by the 10th day of the following month.
Millers are expected to generate a payment slip through the iTax system under the tax head "Agency Revenue" and tax sub-head "Sugar Development Levy", then proceed to make the payment.
According to the Authority, the payment should be made either through KRA agent banks or via mobile money using the eCitizen Paybill Number 222 222, or by dialling *222#.
For imported sugar, the levy will be payable at the time of importation and declaration through the Customs system, at the rate of 4 per cent of the cost, insurance, and freight value of each consignment.
By introducing the levy, the government aims to streamline the sugar industry by channelling the proceeds toward the development and promotion of sugarcane growers and other stakeholders.
The latest announcement comes hardly two months after President William Ruto's administration announced it would invest Ksh4 billion annually through the levy to support the sector.
“These investments are designed to secure the long-term sustainability of the sugar industry,” Agriculture CS Kagwe affirmed.
Speaking during a visit to West Kenya Sugar Company on June 16, Kagwe noted that out of the Ksh4 billion annual investment plan, 40 per cent, approximately Ksh2 billion, would be utilised in cane development programmes across the country.
He added that the remaining 60 per cent would go towards the development of other strategic sectors aimed at positively growing the sugar industry.
However, the implementation of the new levy is expected to raise the cost of sugar, which has, in recent months, experienced a significant price drop.
