Imported sugar will now attract a much heavier tax after lawmakers approved a sharp increase that pushes the levy from Sh7.5 per kilogram to Sh40, in a decision aimed at strengthening local sugar factories but already drawing concern over possible pressure on household prices.
The change was approved in the National Assembly under the Finance Bill 2026 after MPs backed a last-minute amendment that significantly raised the duty beyond what had been suggested at the committee stage.
The National Treasury had first proposed a specific excise duty of Sh7.5 per kilogram on imported sugar, with exemptions for sugar meant for pharmaceutical use and licensed refiners.
That figure was later adjusted upward by the Finance and Planning Committee to Sh10 per kilogram before a further change was introduced during debate in the House.
Kimani Kuria, Molo MP and chairperson of the committee, moved the final amendment raising the rate to Sh40 per kilogram, saying the adjustment was meant to give local millers a fairer chance in the market.
"We are now proposing to increase tax on imported sugar. The current rate of imported sugar is Sh7.5 per kilogramme. Our committee report had recommended Sh10 per kilogramme, but upon further consultation, I am moving this further. This is amended by making it Sh40 per kilogramme, Honourable Speaker," said Mr Kuria. "This would mean that all the companies, Honourable Speaker, that are producing sugar... we are now going to make it easier for them to sell sugar in this country," he added.
The proposal received strong backing from many MPs drawn mainly from sugar-growing regions in Nyanza and Western Kenya, who argued that local farmers and millers have been struggling against cheap imports, which they say are flooding the market from countries such as Brazil.
The Bill has now been forwarded to the President for assent after clearing the Third Reading with 122 lawmakers supporting it and 40 opposing it.
Those who opposed the change warned that the higher tax could end up increasing the retail price of sugar, especially given Kenya’s dependence on imports to meet local demand.
Embakasi East MP Babu Owino said the country’s production gap makes it difficult to absorb such a steep tax without passing the cost to consumers. Kenya produces about 613,000 tonnes of sugar annually against a national demand of about 1.2 million tonnes, leaving a shortfall of around 587,000 tonnes that is met through imports, according to figures from the Kenya Sugar Board.
The decision also comes at a time when Kenya has been moving away from long-standing trade protections within the Common Market for Eastern and Southern Africa framework.
Earlier this year, the Kenya Sugar Board confirmed that Kenya had exited the sugar import safeguard regime under Comesa, ending more than 20 years of protection that had allowed the country to restrict cheaper imports from the bloc.
The safeguard arrangement had been extended several times over the years as the sector struggled to remain competitive.
“It is a contradiction because they are still imposing a barrier that will attract retaliation,” said Timothy Njagi, a research fellow at Tegemeo Institute, a policy think-tank linked to Egerton University.
Kenya has relied on the Comesa safeguard system since 2001 as local sugar factories continued to face debt pressure, ageing machinery, and low efficiency, particularly in State-run mills.
The framework had required reforms including lowering production costs, increasing ethanol and power generation, revising payment systems, and boosting output.
Kenya Sugar Board Chief Executive Officer Jude Chesire defended the removal of the safeguards, saying the country had already exhausted all allowed extensions.
“The safeguards were meant to protect the industry and treat them as infants,” said Mr Chesire in a past interview. He added, “That privatisation was the only condition remaining for the local sugar industry to be competitive. With that condition exhausted, we are supposed to be adults.”