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Govt introduces new 4 per cent levy on local and imported sugar

Govt introduces new 4 per cent levy on local and imported sugar
Agriculture CS Mutahi Kagwe at a past event. PHOTO/@kilimoKE/X

The government has imposed a 4 per cent Sugar Development Levy on all domestically produced and imported sugar, effective from July 1, 2025.

The announcement was made on Tuesday, July 8, 2025, through a public notice by the State Department for Agriculture, sparking mixed reactions across the sector.

The levy, aimed at revitalising the country’s ailing sugar industry, applies to “every miller and every person who imports sugar,” according to the notice.

For locally manufactured sugar, the tax will be calculated based on 4% of the ex-factory price, while imported sugar will attract 4% of the Cost, Insurance, and Freight (CIF) value of each consignment.

“The Sugar Development Levy is now in effect from 1st July 2025,” the notice stated. “The levy shall be remitted by the tenth day of the month following the sale or importation.”

KRA appointed

To manage and enforce compliance, the Cabinet Secretary for Agriculture and Livestock Development has appointed the Kenya Revenue Authority (KRA) as the official collecting agent.

“The KRA will issue a communication advising on the mode of collection,” the ministry noted.

The levy is expected to raise critical funds for sugar sector development, including investments in research, infrastructure, and farmer support.

A post by the Ministry of Agriculture announcing the implementation of the 4% Sugar Development Levy effective July 1, 2025. PHOTO/A screengrab by People Daily Digital from an X post from @kilimoKE

Stakeholders urged to comply

In a strong call for accountability, the Principal Secretary urged all stakeholders to play their part in reviving the sugar sub-sector.

“We are committed to ensuring that every coin collected through this levy is reinvested back into the sector to benefit farmers,” the PS said.

However, some stakeholders have expressed concern over potential price hikes and the impact on manufacturing costs.

The ministry assured that measures would be put in place to cushion consumers and prevent exploitation.

“All inquiries can be channeled to the State Department for Agriculture or the Kenya Sugar Board,” the notice concluded.

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