Kenya's government, through the Finance Bill 2026, proposes an 8 percent reduction in input VAT for agricultural exporters, aiming to alleviate costs and cash flow issues in the sector. This move would cut the VAT rate from the current 16 percent.

• The bill, if approved, will eliminate excise duty and export promotion levies on packaging materials, facilitate faster VAT refunds via offsetting, and provide preferential tax treatment (similar to EPZs and SEZs) for long-standing exporters who exclusively sell abroad, exempting VAT on local purchases.
• Agriculture Cabinet Secretary Mutahi Kagwe highlighted that these measures seek to address challenges like persistent VAT refund delays and high statutory charges, noting that Sh470 million of Flamingo Group Investments' Sh1.8 billion VAT refund backlog has already been paid.
• The reforms also include plans to boost air freight capacity via Kenya Airways and other international carriers to support agricultural exports, benefiting sectors such as horticulture, tea, coffee, and livestock.