The government has introduced a new levy that will apply to both domestic and imported sugar.

Agriculture Cabinet Secretary Aden Duale announced that the Sugar Development Levy, effective February 1, 2025, will direct much-needed revenue towards supporting the sector’s growth.

The levy is set at four per cent of the value for locally produced sugar and four per cent of the cost, insurance, and freight (CIF) value for imported sugar.

As stated in the legal notice, “There is hereby imposed a levy, as prescribed in Section 40 (1) of the Sugar Act, 2024, at the rate of four per centum of the value for domestic sugar and four per centum of CIF value on imported sugar.”

This new measure comes as the Kenyan sugar industry grapples with rising production costs and fierce competition from foreign sugar imports.

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By creating a reliable stream of funding, the government aims to support initiatives and policies to bolster local production and reduce dependency on imports.

The collected funds will be managed by the Kenya Sugar Board (KSB), which will oversee the implementation of development projects for the sugar industry.

The legal framework mandates that millers pay the levy for locally produced sugar directly to the Kenya Sugar Board (KSB).

On the other hand, the responsibility for collecting the levy on imported sugar will rest with the KSB or its authorised representatives.

To ensure timely compliance, payments for the levy will be due by the 10th day of the month following the month in which the levy is incurred.

This initiative is expected to breathe new life into Kenya’s sugar sector, empowering local producers and fostering the development of policies aimed at increasing self-sufficiency and reducing reliance on imported sugar.