KRA Explains How Sugar Development Levy Will Be Collected

The Kenya Revenue Authority (KRA) has outlined how it will collect the newly introduced Sugar Development Levy, targeting both local sugar millers and importers.

In a public notice issued on Friday July 31, 2025, Taxman said the levy was applied from July 1, 2025, following the gazettement of the Sugar Development Levy Order, 2025, by Agriculture Cabinet Secretary Mutahi Kagwe.

“The order imposes the levy on millers and importers of sugar, effective July 1, 2025,” the notice read.

For local millers, the levy will be charged at 4% of the ex-factory price and must be paid by the 10th day of the month following the sugar production.

Payments will be made through the iTax system under the tax head “Agency Revenue” and the sub-head “Sugar Development Levy.” Millers can make payments through KRA agent banks or via mobile money using the eCitizen Paybill Number 22222 or by dialing *222#.

For sugar imports, the levy will also be charged at 4% of the Cost, Insurance, and Freight (CIF) value of each consignment.

The tax will be declared and paid through the Customs System (iCMS) at the point of importation. It applies to sugar falling under EAC CET Tariff Headings 12, 12, 17.01, and 17.03.

According to the government, money collected from the levy will be used to boost infrastructure in the sugar industry, support research, and help sugarcane farmers across the country.

To support this initiative, the government has pledged to invest Sh4 billion annually through the levy, with about 40 per cent—roughly Sh2 billion—going to cane development programs.

While the government says the new levy is aimed at revitalizing the sugar industry and benefiting farmers, some stakeholders have raised concerns that it could lead to higher sugar prices for consumers.