February 05, 2026
Kenyan farmers and exporters have long struggled with delayed VAT refunds, rising input costs, and tight margins that make reinvestment hard. The Finance Bill 2026 promises a game-changing shift, unlocking billions of shillings currently tied up in capital.
Agriculture Cabinet Secretary Mutahi Kagwe says the reforms tackle structural bottlenecks, ensuring farmers and exporters remain competitive and liquid. Input VAT drops from 16% to 8%, excise duty on packaging materials is removed, and export promotion levies are scrapped, lowering production costs for flowers, fresh produce, tea, coffee, and livestock. Faster VAT refunds mean growers can access their own money sooner, investing in irrigation, technology, and worker welfare. Special tax treatment for long-standing exporters will reduce compliance friction and improve predictability.
Logistics are getting a boost, too. Expanded air freight capacity via Kenya Airways and international carriers will cut delays and losses for perishable crops, opening up high-value markets.
This will result in modernised farms, secure jobs, stronger value chains, and thriving rural communities. CS Kagwe sums it up: “When exporters reinvest in Kenya, communities grow, jobs multiply, and the economy strengthens.” For farmers who have weathered years of rising costs, the Finance Bill 2026 offers liquidity, certainty, and the room to grow.
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| How is Kenya’s Flower Sector Stifled by Tax Complexity? Kenya’s flower growers are navigating a maze of over 50 taxes and levies across national and county levels, from income and corporate tax to VAT, export fees, phytosanitary service fees, AFA levies, Excise duties, custom Duty Charges, kraft paper packaging materials, water and environmental charges, etc. At the county level, they face local market levies, proposed turnover levies, property and service charges, county government licences, etc. Delayed VAT refunds, often taking 16–20 months, force costly borrowing and stall expansion, while overlapping county charges add unpredictability and double taxation. Industry associations warn that this patchwork undermines competitiveness against regional peers. Simplifying levies, accelerating VAT refunds, and removing unnecessary duties could free up working capital, reduce costs, and help growers invest in sustainable growth. For Kenya to remain a global flower hub, rationalizing the tax environment is no longer optional but urgent. What does the Finance Bill 2026 mean to growers? It means lower production costs, faster access to VAT refunds, improved cash flow, better airlift, and more capital to reinvest in farms, workers, quality, and competitiveness in export markets. How will the Finance Bill 2026 improve both local and Foreign investment? It boosts investor confidence by improving cash flow certainty, lowering operating costs, strengthening export competitiveness, and signalling stable, pro-business policies that make Kenya a more attractive and predictable destination for foreign investment. What will the Finance Bill 2026 help Kenyan produce in the market? Kenya’s produce will be more competitive globally, with lower costs, reliable supply, improved quality, and stronger logistics, enabling exporters to defend market share and grow sales in premium international markets. About Kenya’s Flower Sector Kenya’s flower industry is a leading global supplier, exporting mainly to Europe. Centered in Naivasha, Riftvalley and Mt. Kenya areas, it is a major global player, earning about 108 billion KES (USD 835 million) in exports in 2024 and exporting over 200,000 tonnes of cut flowers annually. It provides around 200,000+ direct jobs and supports millions of livelihoods, with roses dominating and the EU taking about 70 % of exports. It contributes significantly to foreign exchange and emphasizes sustainable practices. Roses, carnations, and lilies dominate, while innovation and logistics drive competitiveness in the international market. |