Consumers are likely to pay more for sugar starting February 1, 2025, following the introduction of a new tax on the sweetener.
Agriculture Cabinet Secretary Aden Duale has officially gazetted the Sugar Development Levy Order, 2025, which imposes a 4% levy on both domestic and imported sugar.
This levy follows the enactment of the Sugar Act of 2024, signed into law by President William Ruto three months ago. The Act gives the Agriculture Cabinet Secretary the power to introduce such a levy.
“There is hereby imposed a levy, as prescribed in Section 40 (1) of the Sugar Act, 2024, at the rate of four per cent of the value for domestic sugar and four per cent of CIF (cost of insurance and freight) value on imported sugar,” Duale stated, reported The Eastliegh Voice
Under the new regulation, local sugar millers must remit the levy to the Kenya Sugar Board (KSB), which has recently been re-established as an independent parastatal. The KSB will collect the levy directly from sugar importers or their designated agents.
“The levy shall be remitted to the board not later than the 10th day of the month following the month during which the levy shall become due,” Duale added.
Funds generated from the Sugar Development Levy will be used to support various activities in the sugar industry, including price stabilization, infrastructure development, and research. The allocation of the funds is as follows: 15% for factory development, 15% for research, 40% for cane productivity, 15% for infrastructure in sugarcane-producing areas, 10% for KSB administration, and 5% for farmers’ organizations.
The KSB, which was recently separated from the Agriculture and Food Authority, will be responsible for overseeing these initiatives and ensuring the effective implementation of the levy.
This new tax is expected to increase sugar prices, which had recently experienced a significant drop.
The levy comes just a month after the government raised the excise duty on imported sugar.
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