Tea exporters get relief as TBK suspends levy on court orders

Court suspends Kenya’s tea levy, offering relief to exporters and importers pending further hearings. [File, Standard]

The Tea Board of Kenya (TBK) has suspended the collection of the tea levy on imports and exports of tea in Kenya seven months after the enforcement of the tax.  

TBK Chief Executive Officer Willy Mutai, in a notice dated October 27, 2026, to all tea buyers, exporters and importers, confirmed the issuance of a conservatory order by the High Court, thus leading to the suspension of the tea levy. 

Last week, the High Court granted an interim order restraining the TBK from collecting or enforcing the tea levy under the Tea (Levy) Regulations, Legal Notice No. 56 of 2026, against imports and exporters of tea in Kenya, pending the hearing and determination of the application before the courts.

“In compliance with the court order, the board has suspended the demand/collection of the tea levy on tea exports/imports with immediate effect. The suspension shall remain in place pending further communication from the board, subject to any further orders or directions of the court,” said Mutai in the statement.

He added that the board has requested the Kenya Revenue Authority (KRA) to suspend collection of the levy accordingly.

The court directives to suspend the Sh2.28 per kg levy charged on made tea came after Mazingira Party of Kenya Chairman John Kiplangat filed a suit before Justice Josephine Mongare at a Machakos court on behalf of small-scale tea farmers, seeking to halt the levy charges.

Through lawyer Marias Manyara, the petitioner sued TBK, Cabinet Secretary in the Ministry of Agriculture, Mutahi Kagwe, the Attorney General, with KTDA listed as the Interested party.

In the suit, the petitioner said that the tea levy was punitive as tea buyers are charged 0.8 per cent of the auction value or customs value for direct sale.

“The continued demand for the levy diminishes the proceeds accruing to small-scale tea farmers and subjects them to continuing financial prejudice,” argued the petitioner.

The Judge directed that the matter be mentioned on November 19 for further directions.

“Notice of Motion Application dated October 19 is certified urgent.  Respondents shall equally file their submissions seven days after being served,” ruled the Judge.

The tea levy was gazetted on April 1, 2026, and TBK subsequently commenced implementation of the same on May 1, 2026. The 0.8 per cent levy is charged on the auction and customs value of made tea. Section 53(4) of the Tea Act 2021 empowers the Cabinet Secretary in charge of agriculture to impose a tea levy and make regulations to manage the same.

Mutai said the tea regulator, through enforcement of the levy, would have netted Sh1.2 billion annually, out of which 65 per cent will be used to finance income, price stabilisation and infrastructure development.

“We have since May 1, 2026, collected more than Sh600 million from the exporters and importers,” he noted.

According to the designated formula on utilisation of the proceeds, 50 per cent was to be extended to support income and price stabilisation, research (20 per cent), infrastructure development (15 per cent) and enhancing regulation (15 per cent).

Further proceeds from the new levy were to be expended to finance the establishment of Common User Facilities (CUF) in Kericho and Dongo Kungu in Mombasa, among other targeted areas.

He explained that TBK will partner with established global supply chain and logistics companies targeting new export destinations largely in North and South Africa in addition to deepening traditional segments. 

The government is required to spend close to Sh1 billion annually to finance the setting up of key innovative market facilities locally and globally to promote tea and price stabilisation. 

Mutai advised all tea buyers, exporters and importers to continue complying with other applicable requirements governing exports/import of tea, including licensing, registration, and permits, quality standards/customs procedures.