November 27, 2025
Growers and exporters are now legally obliged to pay cess fees on agricultural products destined for export, even when operating within Special Economic Zones (SEZs), following a Nyandarua High Court ruling that dismissed a challenge by Royal Herbs. The SEZ enterprise, which transports fresh herbs for export, had sought to nullify Section 8 of the Nyandarua County Finance Act, arguing that the fees unfairly burdened time-sensitive supply chains.
Royal Herbs contended that the county’s cess amounted to double taxation, violated the national government’s tax authority under Articles 209 and 210 of the Constitution, and undermined Kenya’s SEZ policy designed to promote export-led growth. The dispute reached a tipping point when county officials impounded one of the company’s trucks and demanded KSh 161,000 before releasing perishable herbs, threatening significant losses.
Justice Waweru Kiarie ruled in favour of the county government, holding that the Constitution permits both national and county governments to impose charges for services. The court framed cess as a fee for specific services such as road maintenance and produce inspection, rather than a tax, and asserted that such fees must be proportionate to the cost of the services provided.
While the ruling clarifies the legal distinction between taxes and service fees, growers argue it places undue financial pressure on exporters and SEZ enterprises, who must contend with time-sensitive logistics, perishable produce, and already tight margins. Many in the agricultural sector fear that these fees could ripple through supply chains, raising costs for farmers and potentially undermining Kenya’s competitiveness in global markets.
For now, counties retain broad authority to levy user fees, but the ruling leaves exporters navigating a challenging landscape where local levies can directly impact cash flow and product viability. Growers and SEZ operators are left calling for dialogue on balancing service costs with the practical realities of export agriculture.