Kenya’s tea industry is edging closer to a major financial overhaul after key players reached an out-of-court settlement supporting a new funding model for the sector, with the Tea Board of Kenya proposing a reduction in the statutory export levy from 1 per cent to 0.8 per cent.
The proposed changes, which follow years of legal disputes stemming from the implementation of the Tea Act, 2020, are expected to reshape how resources are collected and invested across the tea value chain while strengthening research, regulation, market expansion and infrastructure.
The agreement was reached through mediation involving key industry stakeholders, including the Kenya Tea Development Agency (KTDA) and the East African Tea Traders Association (EATTA), marking a significant step towards resolving long-standing disagreements over the sector’s financing framework.
According to the Tea Board of Kenya, the revised levy will be charged at 0.8 per cent of the bulk export value instead of the current 1 per cent based on auction value.
Using Kenya’s 2025 tea export performance as a benchmark, the Board projects the revised levy would generate about KSh1.3 billion. In 2025, Kenya exported 594 million kilograms of tea, earning approximately KSh182 billion.
Under the proposed funding model, the existing stabilisation fund would be abolished, with the revenue instead channelled directly into priority areas considered critical to the industry’s long-term growth.
According to the Tea Board, 40 percent of the money would go into funding their regulation activities, 30 percent for the Tea Research Foundation to boost research and innovations while 20 percent would go into market development and international branding of the Kenyan tea and the last 10 percent would go into infrastructure development in tea growing areas in proportion.
The Tea Board is hopeful that the new structure will address the issues regarding financial challenges that have plagued the industry for long while boosting the international competitiveness of the Kenyan tea.
Tea Board Presents Proposals to Parliament
The proposed reforms were submitted on Tuesday as the Tea Board of Kenya testified before the National Assembly Departmental Committee on Agriculture and Livestock, chaired by Hon. (Dr.) John Mutunga, on the Tea (Amendment) Bill, 2023.
In the process of making their presentations, the Board reiterated their commitment to legislative changes that would enhance governance, accountability, and sustainable growth of the country’s tea industry.
It was emphasized by the Board that the amendments combined with the newly developed levy distribution system would contribute to creating a sustainable financing mechanism able to facilitate research, regulation, expansion of markets, and infrastructure development for the benefit of tea growers and the industry as a whole.
