Kenya has potentially lost an estimated Sh1.9 billion in foreign currency following the decision of the East Africa Tea Trade Association to boycott the weekly tea auction to protest the introduction of a new levy by the government.
The government introduced the ad valorem levy, which is charged on the export and import of tea at the rate of one per cent of the customs value. The levy, which EATTA said has increased tax on tea by more than 500 per cent, is meant to replace the manufactures levy which was charged at Sh0.46 per kilogram of tea made. It was gazetted on January 27 by the Agriculture ministry and was effective from February 27.
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