The Cabinet of Ministers of Kyrgyzstan introduced a new measure aimed at supporting the country’s horticulture and floriculture sectors by expanding the list of goods exempt from value-added tax. Under the updated regulation, which came into force on August 25, 2025, the import of tulip bulbs, tubers, corms, rhizomes, and similar vegetative parts has been granted VAT-free status. These items are now officially included in Annex No. 10 of Government Resolution No. 131, originally adopted on March 11, 2022, with the amendment published earlier this month.
The decision is expected to reduce costs for growers, traders, and businesses working with ornamental plants, creating an enabling environment for investment in floriculture. By removing VAT from these inputs, the government aims to ease financial pressures on importers while also making ornamental planting materials more accessible across the market. Industry observers note that such measures could encourage the growth of a more competitive domestic flower industry while aligning with broader efforts to diversify the agricultural economy.
Kenya continues to be the leading exporter of flowers to Kyrgyzstan, with shipments reaching 16.67 million flowers worth $4.97 million in 2024. This marks a significant increase from 2023, when the country supplied 12.16 million flowers valued at $3.5 million.
Kyrgyzstan saw a sharp rise in flower imports in 2024, reflecting a growing demand for floral products in the region. In the first 11 months of the year, the country imported 29.2 million tons of cut flowers and buds worth $11.22 million, almost doubling the 16.25 million tons valued at $5.83 million imported in 2023.
The measure by Kyrgyzstan is not good news for Kenya and could potentially have a negative impact on Kenya’s floriculture exports to that market. The VAT exemption is for imported tulip bulbs and other vegetative parts, which aims to boost Kyrgyzstan’s domestic floriculture industry, increasing competition for Kenya’s flower exports.
The Possible Direct Impact on Kenyan Exports
- The policy creates a long-term competitive threat: The VAT exemption on bulbs allows Kyrgyzstan to strengthen its domestic floriculture industry. By lowering the cost of production for local growers, the policy increases competition for all flower imports, including Kenyan roses. This could lead to decreased demand for imported finished flowers.
- Targets a key market: While Kenya primarily exports roses to Kyrgyzstan, the tulip market is a significant component of the overall floriculture market. A stronger domestic industry in Kyrgyzstan could eventually reduce demand for imported flowers in general.
- Market diversification challenges: Any policy that supports local production in an export market is a headwind for the exporting country. It complicates Kenya’s strategy to expand and diversify its floriculture exports to non-traditional markets like Central Asia.