The Ministry of Agriculture has officially enforced a 4% Sugar Development Levy on sugar millers and importers, with the directive coming into effect from July 1, 2025.
In a statement issued on Tuesday, July 8, the Ministry confirmed that the new levy will be collected by the Kenya Revenue Authority (KRA) and must be remitted by the 10th day of every subsequent month.
WHO WILL PAY THE SUGAR LEVY?
According to the Ministry, the levy is applicable to:
- All sugar millers, charged 4% of the ex-factory price for locally manufactured sugar.
- All sugar importers, charged 4% of the CIF (Cost, Insurance, and Freight) value for every imported sugar consignment.
“The State Department for Agriculture would like to inform members of the public that the Sugar Development Levy is now in effect from July 1, 2025,” the notice read.
The KRA is expected to provide detailed guidance shortly on how the collection will be conducted.
WHY THE SUGAR DEVELOPMENT LEVY?
Agriculture Cabinet Secretary Mutahi Kagwe, speaking during a recent tour of West Kenya Sugar Company on June 16, stated that the levy is designed to inject Ksh4 billion annually into the sugar sector as part of a broader plan to revive and stabilize the industry.
“These investments are designed to secure the long-term sustainability of the sugar industry,” Kagwe affirmed.
BREAKDOWN OF SUGAR LEVY ALLOCATIONS
The government has outlined a comprehensive investment plan to ensure that the levy contributes to the industry’s growth:
- 40% (Ksh1.6 billion) will go toward cane development programs nationwide.
- 60% (Ksh2.4 billion) will support various strategic industry improvement projects, including:
- Ksh600 million for road rehabilitation in sugarcane-growing zones.
- Ksh600 million for research and innovation to boost productivity.
- Ksh600 million toward factory rehabilitation across the sugar sector.
- Ksh200 million (5%) to strengthen farmer cooperatives and associations.
- The remaining 10% will fund administrative operations through the Sugar Board.
