Tea factories in Murang’a County are urging local MPs to push for changes to the Tea Amendment Bill 2023, warning that, as it stands, the legislation could cost the sector over Sh5 billion annually.
Tea factories in Murang’a have urged local MPs to amend the Tea Amendment Bill 2023, warning it could heavily cost the sector more than Sh5 billion annually.
Directors from all 10 factories said the Bill, if adopted without revisions, would further reduce smallholder farmers’ returns by introducing new levies.
At a meeting in Kandara on Monday, they raised concerns that their crop, already heavily taxed, faces additional burdens that threaten farmers’ incomes.
They highlighted the proposed tea levy of one per cent on the value of bulk exports, earmarked for the Tea Board of Kenya (30 per cent), income stabilisation (40 per cent), Tea Research Foundation (20 per cent) and infrastructure (10 per cent).
James Githinji, chairperson of Ngere tea factory and Kenya Tea Development Authority board member for zone two, said the levy should be scrapped or, at minimum, funds returned to farmers, citing the precedent under the Tea Act 2020, which allocated 50 per cent for price stabilisation.
The directors also criticised the proposed Direct Settlement System, which would centralise farmers’ sales in a government-controlled bank account.
They warned it would strip farmers of extra forex earnings, which last year contributed Sh2 billion nationally and risk interference with funds currently managed through KTDA.
Additionally, they opposed raising the KTDA management fee from 1.5 per cent to two per cent, saying this would cost farmers an extra Sh1 billion nationally and Sh17 million in Murang’a alone.
They also challenged restrictions on factory board composition, citing conflicts with the Companies Act and the memorandum of association, which allow up to nine directors, while the Bill caps the number at five.
Other concerns included registration fees for auction organisers, which could cost each of the 71 KTDA-managed factories more than Sh1.1 million annually.
Kigumo MP Joseph Munyoro said tea-growing region MPs would align their position ahead of the Bill’s third reading.
Nominated MP Sabina Chege and Gatanga MP Edward Muriu emphasised safeguarding Murang’a’s production base and warned against overregulating factories, including proposed gender representation requirements.
The directors urged unity among MPs to protect farmers’ incomes and reduce levies, arguing that the sector is already overtaxed from packaging, transport, fuel, insurance and county charges.
