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Kenya Targets Agricultural Export Growth With Tax Relief Package

Kenya Targets Agricultural Export Growth With Tax Relief Package
Friday, 23 January 2026 15:02
  • Kenya plans to cut value-added tax on agricultural inputs to 8% under the 2026 finance bill to lower production costs.

  • The government plans to remove excise duties and export promotion taxes on packaging materials used by horticulture exporters.

  • Authorities aim to accelerate VAT refunds and extend export-zone tax treatment to fully export-oriented operators.

The Kenyan government plans to halve the value-added tax on agricultural inputs to 8% under the 2026 finance bill, which Parliament will review in March. The Ministry of Agriculture announced the proposal in a statement published on January 22, and said the measure forms part of a broader package of tax reliefs aimed at stimulating agricultural exports.

While the planned VAT reduction targets lower production costs, the government also plans to remove excise duties and export promotion taxes on packaging materials. Authorities identified packaging as a key cost item for horticultural value chains, including fruits, vegetables and cut flowers.

In addition, authorities plan to accelerate VAT refunds through offset mechanisms. The government also plans to grant fully export-oriented operators the same tax treatment as firms operating in export processing zones (EPZs) and special economic zones (SEZs) by removing VAT on local purchases. These initiatives signal a political push to improve the international competitiveness of Kenyan products.

“These reforms should unlock billions of shillings in capital currently tied up with exporters and accelerate investment in horticulture, tea, coffee and livestock value chains, strengthening Kenya’s competitiveness and consolidating its position as an African horticultural powerhouse,” the statement said.

Data compiled by the Kenya National Bureau of Statistics showed tea export revenues rose nearly 45%, increasing to 188.7 billion shillings ($1.46 billion) in 2023 from 130.3 billion shillings ($1 billion) in 2020.

This article was initially published in French by Stéphanas Assocle

Adapted in English by Ange J. A. de BERRY QUENUM

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