President William Ruto has assured tycoons and stakeholders in the tea sector that his administration is working to remove taxes on packaging materials imported into the country.
Speaking on Thursday during the launch of the Lipton Tea Innovation and Technology Academy at State House, the Head of State noted that his administration was concluding the necessary approval before its rollout.
He noted that the agreement, which was borne out of a meeting he held with Lipton company management in the Hague 10 months ago, was already included in the 2023/2024 Finance Act.
Ruto added that the tax removal was aimed at improving the quality of the yield as well as boost the returns while lowering the cost of production.
"When I was at the Hague, I insisted on meeting these people and they came forward. We had a 2-and-a-half-hour meeting, sometimes difficult it was but finally, it came out as a very productive meeting," the president told the congregation.
"As one of the MPs has said, because of that conversation, Parliament passed legislation in our Finance bill to remove taxes on packaging material on our tea, especially tea that is meant for export. It is my commitment that we shall conclude that exercise and make it realistic for packaging material to be imported into Kenya without taxes so that we can increase the value-addition mechanisms in our country."
The Head of State was responding to a senator's question over the implementation of the directive promised when the Act took effect in July last year. The Senator in question manages three tea factories.
During his speech, Ruto noted that he approached Lipton management for the set-up of the academy aimed at boosting production of quality tea and 'reclaiming Kenya's position as the best tea worldwide.'
He added that the meeting was tense but eventually, the company known for its array of tea across supermarkets and hotels in Europe agreed to pump Ksh73 billion (USD500 million) into the academy.
"When I met Lipton's corporate leadership, I told them that we are partners. You buy the largest quantities of teas from us. We are partners because we grow the tea and you sell the tea. We agreed on things they needed to do and what we needed to do," he added noting that Kenya tea will now run the label 'Made in Kenya.'
He further promised that the institution would work with tertiary training institutions and farmers to boost production while maintaining sustainability.
In 2022, Kenya was the second largest tea exporter in the world generating an estimated Ksh200 billion in revenue.
In the ranking compiled by software trading company, Contago, based on trade statistics, Kenya was only beaten by China which had earnings estimated at Ksh330 billion.
