Kenya’s tea sector now operates under a formal levy regime that sets a modest export charge alongside a steep, protective charge on imported tea. The Tea (Levy) Regulations, 2026 set the rate, the payment mechanics, and the permit system that exporters and importers must follow, and they attach a criminal penalty to false declarations. This article covers what the Regulations actually require and who needs to pay attention to them.
The New Law: The Tea (Levy) Regulations, 2026
The Tea (Levy) Regulations, 2026 (Legal Notice 56 of 2026) were published in the Kenya Gazette on 1 April 2026 and commenced on 1 May 2026, thirty days after publication. They are made under section 53(1) of the Tea Act and were subsequently amended by the Tea (Levy) (Amendment) Regulations, 2026 (Legal Notice 150 of 2026), which took effect on 18 August 2026 and revised the exemption provision discussed below. The Regulations set out the imposition and exemption of the tea levy, its rate, how it is paid and collected, and how the proceeds are used for infrastructure development in tea-growing areas.
The Levy Rate: 0.8 Per Cent on Exports, 100 Per Cent on Imports
Regulation 4 imposes the levy on both tea exports and tea imports, and the two rates are worth reading carefully because they are not close to each other. Tea exports attract a levy of 0.8 per cent of the auction value, or of the customs value where the sale is a direct sale outside the auction system. Where Kenyan tea has been blended with non-Kenyan tea for a direct sale, the levy is computed only on the Kenyan tea portion of the blend. Tea imports, by contrast, attract a levy of 100 per cent of the import value on each consignment of made tea. That is not a typographical figure: the Regulations impose a levy equal to the full declared value of any made tea entering Kenya, which functions as a steep protective charge on foreign tea reaching the Kenyan market.
The 100 per cent import rate also reaches two situations that businesses in the trade should note specifically. A person who buys non-Kenyan tea at the Kenyan tea auction and then diverts it into the Kenyan domestic market is liable for the levy at the same 100 per cent import rate. A person who imports non-Kenyan tea from an Export Processing Zone or a Special Economic Zone into the rest of Kenya is liable on the same basis. Both provisions close off routes that might otherwise have let foreign tea reach Kenyan consumers without attracting the import levy.
Exemptions From the Levy
Regulation 5, as amended in August 2026, exempts three categories from the levy: exports of value-added tea packed in containers of ten kilograms or less, exports of tea extracts and tea aroma, and Kenyan tea value-added within an Export Processing Zone or Special Economic Zone for local consumption. Businesses in retail-pack export or tea extract production should confirm their specific product and packaging fall within these exemptions before assuming the levy does not apply, since they are drawn narrowly around specific categories rather than value-added tea generally.
Declaration, Payment and the Export or Import Permit
Regulation 8 requires an exporter or importer to declare the value of their tea exports or imports, and the applicable levy, to the Tea Board at the time of export or import, using prescribed forms. The Tea Board or the Kenya Revenue Authority, acting as its collecting agent, verifies this documentation to authenticate the declaration. A false declaration, or a failure to declare, is a criminal offence under section 71 of the Tea Act, carrying a fine of up to five hundred thousand shillings or a fine of up to twice the value of the tea involved, or imprisonment for up to one year, or both. Exporters and importers should treat declared values as a compliance matter with real criminal exposure, not routine paperwork.
Once the levy is paid, the Board or Authority issues a receipt, and regulation 10 requires the Board to issue a Tea Export or Tea Import Permit within three days of verifying the documentation and confirming payment. The Board will not issue a permit unless the levy has been paid and the exporter or importer has complied with the Tea Act and the Regulations, and it may cancel a permit already issued if a contravention comes to light. The permit is the operational gatekeeper: no compliant declaration and payment means no permit, and no permit means the consignment cannot move.
Default, Interest and Remittance
Regulation 11 treats any unpaid levy as a civil debt recoverable by the Board, and adds an interest charge at the prevailing Central Bank of Kenya rate on any amount that remains unpaid more than thirty days after it fell due. Where the Kenya Revenue Authority collects the levy as the Board’s agent, regulation 12 requires it to remit the collected amounts to the Board by the thirtieth day of the following month, which gives businesses a reference point for when funds they have paid should actually reach the Board.
Where the Money Goes
Regulation 13 requires the Board to disburse levy proceeds to tea-growing county governments as conditional grants, based on each county’s tea production, for infrastructure development within the tea catchment areas of that county. This ties the levy directly back to the growing regions rather than treating it as general revenue, and it gives tea businesses operating in a particular county a concrete link between what they pay and the roads, buying centres and other facilities the levy is meant to fund in that same area.
Why This Matters for Exporters, Importers and Blenders
For exporters, the 0.8 per cent rate is a manageable cost of doing business, but the permit requirement means consignments cannot move without a verified declaration and proof of payment, so timing the declaration correctly matters for supply chain planning. For any business importing tea into Kenya, blending Kenyan and foreign tea, or moving tea out of an EPZ or SEZ into the domestic market, the 100 per cent levy is a materially different proposition that should be built into pricing and sourcing decisions from the outset. Businesses relying on third-party trading partners for auction purchases should also confirm those partners are not diverting non-Kenyan tea into the domestic market in a way that creates unexpected levy exposure.
How We Can Help
Clay & Associates Advocates advises agribusiness exporters, importers and processors on regulatory compliance, licensing and engagement with Kenyan trade authorities. Our guide to horticultural export licensing in Kenya covers related compliance obligations for agricultural exporters. Contact our Regulatory & Compliance practice to discuss how the levy affects your tea trading, blending or export operations.
Sources: The Tea (Levy) Regulations, 2026 (Legal Notice 56 of 2026, as amended by Legal Notice 150 of 2026), regulations 1 to 13.
Frequently asked questions
What is the tea levy rate on exports?
0.8 per cent of the auction value, or of the customs value for a direct sale outside the auction system. For blended tea sold directly, the levy applies only to the Kenyan tea portion of the blend.
What is the tea levy rate on imports?
100 per cent of the import value of each consignment of made tea. The same rate applies to non-Kenyan tea diverted from the auction into the domestic market, and to non-Kenyan tea imported into Kenya from an EPZ or SEZ.
What happens if an exporter or importer makes a false declaration?
It is an offence under section 71 of the Tea Act, carrying a fine of up to five hundred thousand shillings or up to twice the value of the tea, imprisonment for up to one year, or both.
Can an exporter move tea without a permit?
No. The Tea Board issues a Tea Export or Tea Import Permit only once the levy has been verified as paid and the exporter or importer has complied with the Tea Act and the Regulations, and the Board may cancel a permit for a later contravention.
