Kenya Tax Regime
The Kenyan tax regime applicable to bulk commodity import in 2026 is the product of three recent legislative cycles:
- Finance Act 2023 — passed June 2023; declared unconstitutional by the Court of Appeal on 31 July 2024 (National Assembly & another v Okiya Omtatah Okoiti & 55 others, Civil Appeal E003 of 2023 consolidated with five 2024 appeals, KECA 876). The Supreme Court stayed the Court of Appeal decision on 20 August 2024 and on 29 October 2024 substantively upheld the Finance Act 2023 as constitutional. As of 2026 the Act stands, subject to subsequent amendments via TLAA 2024 and Finance Act 2025
- Tax Laws (Amendment) Act 2024 (No. 24 of 2024) — passed December 2024, replacing the withdrawn Finance Bill 2024. Raised RDL to 2.0%; restored agricultural-input concessions
- Finance Act 2025 (No. 22 of 2025) — assented 30 June 2025, in force from 1 July 2025. Moved fertilizer from VAT zero-rated to VAT exempt. Same end-consumer outcome as zero-rating (no VAT charged at retail), but supplier input VAT on freight, port handling and inspection services is no longer recoverable
VAT Treatment for Sarpah Lines
| Item | VAT status (post-Tax Laws Amendment Act 2024 / Finance Act 2025) |
|---|---|
| Mineral fertilizer (Chapter 31) | Exempt under Finance Act 2025 (effective 1 July 2025) — same end-consumer outcome as zero-rated, but supplier input VAT on freight, port handling and inspection services is no longer recoverable |
| Pest control products (HS 3808 — agricultural use) | Zero-rated under specific listings |
| Wheat (HS 1001) | Zero-rated as unprocessed agricultural produce |
| Maize / corn (HS 1005) | Zero-rated unprocessed |
| Maize flour, wheat flour | Zero-rated |
| Sugar (HS 1701) | Standard 16% + Sugar Development Levy 4% (Sugar Act 2024) |
| Sunflower seeds, oilseeds | Zero-rated as raw input |
| Crude edible oil | Zero-rated as crude refining input |
| Refined edible oil | Standard 16% |
| Dry milk (HS 0402) | Zero-rated under Second Schedule |
| Petcoke (HS 2713) | Standard 16% |
| Sawn timber (HS 4407) | Standard 16% |
| Plywood (HS 4412) | Standard 16% |
Other Import-Stage Levies (2026)
| Levy | Rate | Statutory basis |
|---|---|---|
| Import Declaration Fee (IDF) | 2.5% of CIF; min KES 5,000 | Miscellaneous Fees and Levies Act 2016 §7 |
| Railway Development Levy (RDL) | 2.0% of CIF | Miscellaneous Fees and Levies Act 2016 §8 |
| Import Duty | Per EAC CET 2022 | EACCMA 2004 + EAC Gazette CET 2022 |
| Excise Duty | Per Excise Duty Act 2015 | Excise Duty Act 2015 |
| Standards Levy | 0.2% of ex-factory (local manufacture) | Standards Levy Order |
| AFA Cess | 1–4% on AFA-scheduled crops only — cereals, sugar, tea, coffee, horticulture, nuts/oil crops, fibre, food crops; not levied on fertilizer | Crops Act 2013, AFA Regulations |
| Wharfage / port handling | Per KPA tariff | KPA Tariff Book 2025 (effective 22 December 2025) |
| Sugar Development Levy | 4% of CIF | Sugar Act 2024 |
| Petroleum Development Levy | KES 5.40 / litre (2025) | Petroleum Development Levy Act |
| Anti-Counterfeit Authority Levy | 0.25% on registered IPR goods | Anti-Counterfeit Act 2008 |
Withholding Tax on Import Services
Under the Income Tax Act, Cap 470 (s.35):
| Service | WHT rate (non-resident) |
|---|---|
| Management or professional fees | 20% |
| Royalties | 20% |
| Technical services | 20% (subject to DTA) |
| Inspection / surveillance services performed in Kenya | 20% |
| Inspection performed outside Kenya (PVoC at loadport) | Not subject to Kenyan WHT — service performed and consumed outside Kenya |
| Freight / transport (resident haulier) | 5% on payment to local |
Russia DTA: 7.5% on royalties and technical fees (where applicable).
Operational note: PVoC inspection fees paid to the appointed PVoC partners under the 2026–2029 cycle (list at /compliance/kebs-pvoc) at the loadport — i.e., outside Kenya — are not subject to Kenyan WHT. Where the SPA structures the PVoC fee as paid by the seller, the WHT question does not arise on the buyer side.
Stamp Duty
Under the Stamp Duty Act, Cap 480:
- Guarantees / bonds — KES 200 fixed duty
- Letters of credit — KES 200 fixed duty
- Charge / mortgage securing trade finance — 0.1% of secured amount
- Power of attorney — KES 200
Indicative Fee Stack on a $1m CIF Fertilizer Cargo
For a $1,000,000 CIF Mombasa fertilizer cargo (urea / DAP / NPK), the import-stage fee stack:
| Fee | Calculation | Amount |
|---|---|---|
| Import Duty | 0% on fertilizer HS codes | $0 |
| VAT | Exempt (Finance Act 2025) | $0 at retail; supplier input VAT on freight/handling not recoverable |
| IDF | 2.5% × $1m | $25,000 |
| RDL | 2.0% × $1m | $20,000 |
| AFA Cess | Not levied on fertilizer | $0 |
| KEBS Standards Levy | 0% (import) | $0 |
| ACA Levy | 0% (unbranded bulk) | $0 |
| Subtotal Kenya-side levies | ~$45,000 | |
| Wharfage / port handling | KPA tariff | ~$5,000–10,000 |
| Inland transport Mombasa → Eldoret | $95–150/MT × 25,000 MT | ~$2.4M–3.8M (separate from CIF) |
The headline number: ~4.5% Kenya-side levies on the CIF value of a fertilizer cargo, plus KPA wharfage and the unrecovered input-VAT cost on freight and inspection services. For grain, sugar and edible oil, the levy stack is higher due to import duty on the underlying CET classification and AFA Cess where applicable.
The Finance Act 2023 Litigation
The Finance Act 2023 has had a contested constitutional history. The Court of Appeal declared the Act unconstitutional on 31 July 2024 in National Assembly & another v Okiya Omtatah Okoiti & 55 others (Civil Appeal E003 of 2023 consolidated with Civil Appeals E016, E021, E049, E064 and E080 of 2024, citation KECA 876). The judgement turned on procedural grounds — public-participation deficiencies in the legislative process.
The Supreme Court stayed the Court of Appeal's declaration of unconstitutionality on 20 August 2024, restoring the Act pending substantive determination. On 29 October 2024 the Supreme Court substantively upheld the Finance Act 2023 as constitutional, reversing the Court of Appeal. As of 2026 the Act stands.
The Tax Laws (Amendment) Act 2024 was passed in December 2024 to introduce additional revenue measures (including raising the RDL to 2.0%) while maintaining agricultural-input concessions. The Finance Act 2025 then moved fertilizer from VAT zero-rated to VAT exempt, effective 1 July 2025.
For commodity importers, the practical effect in 2026: fertilizer is VAT exempt — no VAT charged at retail, but supplier input VAT on freight, port handling and inspection services is no longer recoverable. Unprocessed agricultural produce (wheat, maize) remains zero-rated.
Sources
- VAT Act 2013 (consolidated) — Kenya Law
- Income Tax Act Cap 470 (consolidated) — Kenya Law
- Miscellaneous Fees and Levies Act 2016 — Kenya Law
- Tax Laws (Amendment) Act 2024 — Kenya Law
- Finance Act 2025 — Kenya Law
- KPMG East Africa Finance Act 2025 analysis
- National Assembly & another v Okiya Omtatah Okoiti & 55 others — Court of Appeal KECA 876 (31 July 2024); Supreme Court ruling 29 October 2024
- KRA portal — https://www.kra.go.ke