The government has unveiled sweeping tax and regulatory reforms aimed at supporting agricultural exporters under the Finance Bill 2026, which is set to be tabled in the National Assembly in March, in a major boost to Kenya’s export-led growth strategy.
Agriculture Cabinet Secretary Mutahi Kagwe said the measures are intended to ease cash-flow pressures, unlock reinvestment and restore exporter confidence following years of delayed VAT refunds and high levies.
Key proposals include reducing input VAT from 16 per cent to 8 per cent, scrapping excise duty and export promotion levies on packaging materials, fast-tracking VAT refunds through offsetting mechanisms, and granting long-standing 100 per cent exporters Export Processing Zone (EPZ) and Special Economic Zone (SEZ)-like treatment to eliminate VAT on local purchases.
The reforms will also expand air freight capacity through Kenya Airways and the entry of additional international carriers to support agricultural exports.
Kagwe was speaking during the launch of Flamingo Group Investments’ KSh2 billion expansion project in Naivasha, which is expected to create 500 new jobs and scale up value-added flower production for export to Europe and the United Kingdom.
He confirmed that the government has already paid KSh470 million of Flamingo’s KSh1.8 billion VAT refund backlog, with further disbursements scheduled.
The reforms are expected to unlock billions of shillings in stalled exporter capital and accelerate investment across the horticulture, tea, coffee and livestock value chains, strengthening Kenya’s competitiveness and cementing its position as Africa’s horticultural powerhouse.
