The government has announced the introduction of a four per cent Sugar Development Levy (SDL) on all locally produced and imported sugar, effective July 1, 2025.
In a statement, the Ministry of Agriculture said the levy is part of efforts to revitalise the struggling sugar industry.
According to the ministry, the levy will be charged at four per cent of the ex-factory price for domestic sugar and four per cent of the cost, insurance, and freight (CIF) value for imported sugar.
It will be payable by all millers and importers, with payments due by the 10th day of the month following the sale or importation of sugar.
The Kenya Revenue Authority (KRA) has been appointed as the collection agent and will issue further guidelines on the payment process.
“KRA will issue a communication advising on the mode of collection,” the ministry stated.
While the government maintains that the funds will strengthen sugar sector infrastructure, support research, and benefit farmers, stakeholders have voiced concerns.
They warn that he additional cost could lead to higher sugar prices for consumers.
The levy’s introduction follows the gazettment of the Sugar Development Levy Order, 2025, under Section 40 (1) of the Sugar Act, No. 11 of 2024, by Agriculture Cabinet Secretary Mutahi Kagwe.
The main objective of the Order is to streamline levy collection on both domestic and imported sugar, with proceeds channelled toward the development, promotion, and regulation of the sugar industry for the benefit of sugarcane growers and other stakeholders.
Last month, the government announced it would invest Sh4 billion annually through the SDL to support the sector. Of this, 40 per cent, approximately Sh2 billion, will be allocated to cane development programs across the country.
“These investments are designed to secure the long-term sustainability of the sugar industry,” Kagwe said.
