A group of Mt Kenya lawmakers has raised concerns over proposed levies in the coffee sector, warning that the new charges could undermine recent reforms and hurt farmers’ earnings.
Led by Kirinyaga Senator James Murango, they are opposing a Gazette Notice issued by the government, which outlines a series of fees under the Kenya Subsidiary Legislation, 2025.
The notice, published last December by National Treasury Cabinet Secretary John Mbadi, proposes several charges, including transaction and membership fees for players in the coffee industry.
According to the notice, coffee farmers and industry players would be subjected to several charges, including a 1% broker fee, a 0.3% coffee exchange fee, a 0.3% direct settlement system (DSS) fee, and a 0.2% Capital Markets Authority (CMA) statutory fee.
Additionally, brokers would be required to pay an annual membership fee of Sh75,000, while coffee buyers purchasing more than 1% of the annual coffee output would also be charged Sh75,000. Buyers purchasing less than 1% would pay Sh50,000.
Other industry players, including warehouse operators, millers, transporters, and input suppliers, would be required to pay an annual membership fee of Sh115,000.
Senator Murango and his colleagues argue that these charges will ultimately be passed on to farmers, reducing their incomes despite recent improvements in payouts.
This year, farmers have been earning up to Sh157 per kilogram of cherry, with the lowest payout at Sh121.
Murango questioned why the Treasury was introducing new charges without involving Parliament, stating that existing laws already govern the coffee sector.
“The proposals have come from CS Mbadi and have not passed through Parliament. I don’t know why the rush, yet enough laws govern the coffee sector,” Murango said.
He further pointed out that the 0.3% coffee exchange fee would reduce farmers’ earnings, as it would be deducted from their payments at the Nairobi Coffee Exchange (NCE), which currently lacks a legal board to enforce such charges.
The leaders also criticized the government’s decision to single-source Cooperative Bank as the DSS provider, instead of allowing open tendering.
Murango argued that new legislation under the Capital Markets Act, 2025, contradicts the Coffee Regulations, 2019, which allowed multiple banks to provide DSS services.
“This is like 0.3% being charged on your salary and given to a bank where you receive the salary from, despite the same bank enjoying transaction fees when you withdraw your money,” Murango explained.
The legislators also objected to the 0.2% CMA statutory fee, arguing that coffee should not be the only crop taxed to fund the regulatory authority.
“Why should coffee be the only crop taxed to fund the CMA? I have not seen the same being done to tea or livestock,” Murango added.
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