Kenyan tea traders tasked with value addition for export have warned that Kenyan tea risks losing its global market share due to high taxes which are making it uncompetitive.

Gold Crown Foods EPZ, the only Kenya significant exporter of value-added tea, decried that tea export is overburdened by taxes and high production costs which if unchecked, will significantly hurt export earnings.

Packaging paper

“We have some challenges when we value add for export, accessing high quality packaging paper, the tax of that paper is about 35 per cent at the moment, we need to address the policy on taxation regimes in the country which will facilitate the value addition, because tea sector is a big employer,” Gold Crown tea manager Peter Kimanga.

Kimanga, said Kenya’s value-added tea giant markets, which are Pakistan and Egypt are shrinking due to new demands and competition from other exporters who have lived the expectation of consumers. “The demand for value added products is high at the moment, but we have a problem with the countries that have been buying our teas in bulk, that is Egypt and Pakistan, therefore there is an urgent need to reach into new markets,” said Kimanga.

Speaking to journalists at the firm when the Agriculture Cabinet Secretary Mithika Linturi toured the facility on Tuesday, Kimanga asked the government to relook at its tax regimes because it’s hurting value addition for export, thus denying the government meaningful revenue.

Linturi said the government is seeking to attain equilibrium as it seeks to address unfriendly tax regimes that are adversely affecting the tea sector that significantly generates revenue. “There is need for us to start planning early and since the challenges have been brought early, from our policy level we will have to discuss it where the right decisions can be made, and see how probably the addresses of tariffs can be relooked” said Linturi.