The Coffee Act (No. 8 of 2026) gives Kenya’s coffee sector its own dedicated funding source: the Coffee Development and Marketing Levy. Set at 2.5% of export and import value and collected from coffee buyers, it will fund research, regulation, price stabilisation, marketing and county development grants. For buyers, exporters and importers, it is a direct cost that needs to be built into pricing and contracts. This article explains how the levy is imposed, who pays it, where the money goes, and what to do while the Gazette notice that brings it into effect is awaited.
How the levy is imposed
Section 87(1) provides that the Cabinet Secretary shall, in consultation with the Coffee Board of Kenya and county governments and by notice in the Gazette, impose a levy of two point five per cent on the export import value remitted by coffee buyers to the Board through the direct settlement system, for the development of the coffee industry.
Three points follow from the wording. First, the levy is not self-executing: it takes effect only when the Cabinet Secretary publishes a Gazette notice, after consulting the Board and the counties. Second, the rate is fixed by the Act at 2.5%, so the notice imposes the levy but does not set a different rate. Third, the base is the export or import value, and the levy is remitted by coffee buyers through the direct settlement system.
As at 5 November 2026, we have not found a published Gazette notice imposing the levy. Businesses should check the Kenya Gazette and confirm the position with the Board before relying on that, and should watch for the notice, because it will fix the date from which the levy applies.
Who pays and on what
The Act places the remittance obligation on coffee buyers. A buyer is defined in section 2 as a person licensed by the Board to buy clean coffee at an exchange for export, local sale or value addition, or to import clean coffee for secondary processing in Kenya. On a plain reading, the levy applies to both exports and imports of coffee, and is calculated on the value of the transaction.
To illustrate, on an export consignment valued at USD 100,000 the levy at 2.5% would be USD 2,500. Who bears that cost commercially, the Kenyan buyer, the overseas purchaser or the grower through a lower price, is a matter for contract, but the obligation to remit sits with the buyer.
Several points are not settled by the Act and will need to be addressed in the Gazette notice or in regulations under section 99. These include how “value” is measured (for example free on board or cost, insurance and freight), the exchange rate for foreign currency contracts, when the levy falls due, and how it is collected on coffee sold through direct sales or international exchanges, where the buyer may not be a Kenyan licence holder.
Where the money goes
Section 87(2) apportions the levy as follows.
| Share | Recipient and purpose |
|---|---|
| 30% | Coffee Research and Training Institute |
| 15% | Coffee Board of Kenya, for regulatory purposes |
| 20% | Price stabilisation, managed by the Board |
| 10% | Coffee Board of Kenya, for marketing purposes |
| 25% | County coffee growing areas, on a pro-rata basis, as a conditional grant for coffee development |
Section 86 confirms that money received from the levy forms part of the Board’s funds, alongside parliamentary appropriations and other income. The Board must prepare annual estimates and is subject to audit under sections 88 and 89, so the use of levy income should in time be visible through the Board’s published accounts.
What buyers and exporters should do now
Build the levy into pricing. Treat 2.5% of export or import value as a likely cost from the date of the Gazette notice, and price forward contracts accordingly.
Add a levy clause to contracts. Sale, purchase and agency agreements should say who bears the levy and any other government charge introduced after signing, and allow the price to be adjusted when the notice takes effect. Contracts already signed should be reviewed for any existing change-in-law clause.
Keep good records. Licence holders must already file quarterly returns with the licensing authority under section 32. Clear transaction records, including contract values and currency, will make levy remittance and any later reconciliation straightforward.
Engage on the detail. Because the Cabinet Secretary must consult the Board and county governments before imposing the levy, and regulations under section 99 are likely to address collection, industry participants should use the public participation process to raise practical points on valuation, timing and collection.
How We Can Help
Clay & Associates Advocates advises coffee buyers, exporters and importers on the Coffee Act, including levy clauses in export contracts and compliance with licensing obligations. See our guide to the coffee buyer’s licence and our legal guide to coffee processing and export, and contact our Regulatory & Compliance team to review your contracts.
Sources: Coffee Act (No. 8 of 2026), Kenya Law, sections 2, 32, 86, 87, 88, 89 and 99.
Frequently asked questions
What is the Coffee Development and Marketing Levy?
A levy of 2.5% of the export and import value of coffee, imposed under section 87 of the Coffee Act and remitted by coffee buyers to the Coffee Board of Kenya through the direct settlement system.
Is the coffee levy already in force?
It takes effect only when the Cabinet Secretary publishes a Gazette notice. As at 5 November 2026 we have not found one. Check the Kenya Gazette and confirm with the Board.
Who pays the coffee levy?
Coffee buyers remit it. Who bears the cost commercially depends on the contract with the grower or overseas purchaser.
How is the levy shared out?
30% to the Coffee Research and Training Institute, 15% to the Board for regulation, 20% for price stabilisation managed by the Board, 10% to the Board for marketing and 25% to county coffee growing areas as conditional grants.
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This article is general information on Kenyan law as at its publication date, not legal advice. Reading it does not create an advocate and client relationship.
