Investments, Trade and Industry CS Lee Kinyanjui / HANDOUTKenya has protested Tanzania’s latest business licensing regulations and tax measures, describing them as discriminatory and a threat to regional economic integration within the East African Community (EAC).
In a statement on Wednesday, the Ministry of Investments, Trade and Industry (MITI) expressed deep concern over Tanzania’s Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019, which introduced excise duties and an Industrial Development Levy at rates of 10 and 15 per cent respectively.
Also at the centre of Kenya’s protest is Tanzania’s newly gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which came into effect on July 28.
The order prohibits non-citizens from engaging in 15 categories of businesses, including mobile money transfers, repair of electronics, salon operations, tour guiding, and ownership of micro and small industries.
“The Government of Kenya has noted with concern the imposition of new and discriminatory tax measures by the United Republic of Tanzania, which threaten the regional trade gains,” the statement read.
Cabinet Secretary Lee Kinyanjui warned that the measures undermine commitments made under the EAC Common Market Protocol, which guarantees non-discriminatory treatment among citizens of member states.
Article 13 of the protocol explicitly prohibits treating EAC nationals less favourably than one’s own citizens in matters of business establishment and operation.
“The Business Licensing Order, which seems to be criminalising lawful EAC investments, will hurt both our economies,” Kinyanjui said.
“It is therefore critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues.”
The Tanzanian order states that licensing authorities shall no longer issue or renew licences to non-citizens for the 15 listed activities.
Any non-citizen caught operating such a business risks a fine of not less than TSh10 million (Sh505,800) or imprisonment for up to six months, along with possible visa revocation.
Tanzanians who aid non-citizens in breaching the order also face a fine of TSh5 million (Sh252,900) or imprisonment for up to three months.
Despite the protest, Kenya acknowledged Tanzania’s sovereign right to legislate but emphasised that partner states must consult and coordinate on matters affecting cross-border trade.
"Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol," Kinyanjui said.
Kenya is banking on diplomacy to resolve the standoff and has proposed enhanced bilateral talks, technical meetings and joint sectoral council sessions.
Notably, a technical meeting on tobacco trade is scheduled for August 4–5 in Arusha, followed by a Joint Trade Committee session on August 11–12 to review levies, fees, and charges imposed by both countries.
“The Government of Kenya, through MITI, has been engaging constructively in a number of consultative forums aimed at creating an environment where these trade measures are aligned with the principles of the EAC Customs Union Protocol,” the CS noted.
Further, the 1st Extra-ordinary Sectoral Council on Finance and Economic Affairs (SCFEA) directed the EAC Secretariat to compile a list of tax measures by member states that may contravene the Customs Union Protocol, with a report due by August 30.
A second sectoral council session focusing on compliance is expected by the end of September.
“We are therefore positive that these engagements will yield positive results grounded on the foundational principles of the EAC, including the free movement of goods, people, services, labour and capital,” Kinyanjui said.
Meanwhile, Kenya reiterated her commitment to regional unity as the two neighbours prepare for further talks.
“In line with the spirit of the EAC ‘one people, one destiny,’ we are committed to upholding the principles of non-discrimination, transparency, and equity.”
