The Kenyan government has unveiled a wide-ranging tax relief package aimed at boosting the country’s agricultural exports. The proposals are included in the Finance Bill 2026, which is scheduled to be tabled in Parliament in March 2026.
Under the plan, the value-added tax (VAT) on agricultural inputs will be cut from 16% to 8%, lowering production costs for exporters across key sectors such as horticulture, tea, coffee and livestock.
The government also plans to remove excise duties and export promotion levies on packaging materials , a significant cost factor for producers of fruits, vegetables and cut flowers.
To improve cash flow for exporters, the reforms would speed up VAT refunds through an offsetting system that allows refunds to be applied against future tax liabilities more quickly.
In addition, long-standing exporters who sell all their products abroad would receive special tax treatment similar to that enjoyed in Export Processing Zones (EPZs) and Special Economic Zones (SEZs). This treatment would exempt them from VAT on local purchases, further reducing costs.
The government also intends to expand air-freight capacity by enhancing services from Kenya Airways and welcoming new international carriers, which is expected to help perishable producers reach key markets more efficiently.
Officials say these measures are designed to unlock billions of shillings currently tied up in delayed refunds and high statutory charges, boosting reinvestment, improving competitiveness and strengthening Kenya’s position in global agricultural markets.
If approved by Parliament, the reforms could reshape the export landscape for Kenya’s agriculture sector, enhancing liquidity for producers and supporting job creation in rural value chains.
