Nairobi — Kenya has faulted Tanzania's newly revised business licensing and taxation measures, warning that they "criminalize lawful investments" by East Africans.
Kenya warned on Wednesday the changes targeting non-citizens undermine regional integration efforts under the East African Community (EAC).
Trade and Industry Cabinet Secretary Lee Kinyanjui expressed concern over Tanzania's Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019, which introduced new excise duties and an Industrial Development Levy at rates of 10 per cent and 15 per cent, respectively.
He singled out Tanzania's Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which effectively bans foreigners -- including East Africans -- from operating in fifteen specified business sectors, such as micro and small industries.
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The order, which took immediate effect except for current license holders, carries significant penalties for non-compliance.
"The Business Licensing Order, which seems to be criminalizing lawful EAC investments, will hurt both our economies," Kinyanjui said.
"These measures are substantive and undermine the core objective of regional economic integration under the EAC Common Market Protocol (CMP)."
Kinyanjui cited Article 13 of the CMP, which allows EAC nationals to establish and operate businesses and prohibits partner states from treating other EAC nationals less favorably than their own citizens.
EAC trade at risk
The CS noted that EAC remains Kenya's largest export market, accounting for 28.1 per cent of the country's total exports (estimated at Sh297 billion in 2024).
Tanzania is Kenya's second-largest EAC trading partner after Uganda, with intra-community trade worth Sh63 billion in 2024.
Kinyanjui warned the new measures have made Kenyan goods more expensive in the Tanzanian market, with some products seeing price increases of up to 65 per cent, threatening their competitiveness.
He said Kenya will engage Tanzania through regional mechanisms to resolve the dispute.
Kinyanjui noted that Kenya participated in the 1st Extraordinary Sectoral Council on Finance and Economic Affairs (SCFEA), which directed the EAC Secretariat to compile a list of excise duties, levies, and charges that contravene the EAC Customs Union Protocol by August 30, 2025.
Further engagements include a technical meeting on tobacco trade scheduled for August 4-5 in Arusha and a Joint Trade Committee session to review levies, fees, and charges between August 11-12.
Kinyanjui expressed optimism that the planned discussions will produce "positive results grounded on the foundational principles of the EAC, including the free movement of goods, people, services, labor, and capital."
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"In line with the EAC spirit of 'one people, one destiny,' Kenya remains committed to upholding the principles of non-discrimination, transparency, and equity in all future trade-related decisions," he said.
