Mombasa removes levy on tea for export

Mombasa tea auction. FILE PHOTO | NMG 

By GERALD ANDAE

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Summary

• The East African Tea Traders Association (Eatta) and Mombasa County’s trade department reached an agreement this week that will see trucks ferrying tea meant for export exempted from paying cess.
• The issue was resolved after a meeting with the Mombasa executive committee member and the chief officer for trade.
• The county last month sent a circular to tea stakeholders informing them of the levy on every package transiting through Mombasa.
• The Tea Directorate had condemned the move saying it was not in the best interest of the Kenyan commodity in the international market.

A regional tea traders’ association and Mombasa County have struck a deal scrapping the Sh32 levy imposed by the devolved unit for each package entering the port city.

The East African Tea Traders Association (Eatta) and Mombasa County’s trade department reached an agreement this week that will see trucks ferrying tea meant for export exempted from paying cess.

Eatta managing director Edward Mudibo said the issue was resolved after a meeting with the Mombasa executive committee member and the chief officer for trade.

The association — including producers, buyers, brokers, packers and warehouses — will furnish the county with details of trucks carrying export tea.

“The cess has been abolished after we held talks with the Mombasa County trade department. All we are required to do is to furnish the county with details of trucks ferrying tea meant for export,” said Mr Mudibo.

The county last month sent a circular to tea stakeholders informing them of the levy on every package transiting through Mombasa.

READ: Global price of tea set to rise after Mombasa slaps Sh32 levy per pack

The cess was for the first time introduced in 2014 but was suspended in 2015 following a successful court case against it.

However, the court later ruled in favour of the county thereby allowing Mombasa to collect cess on trucks carrying the commodity and other goods destined for exports.

The Tea Directorate had condemned the move saying it was not in the best interest of the Kenyan commodity in the international market.

Kenyan tea is already expensive in the global market compared with other countries, forcing buyers to blend it with others to make it affordable.

The reintroduction of cess by Mombasa County was also seen as a big blow to the regulator’s efforts in addressing the cost of the local tea.

The directorate has engaged the Kenya National Productivity and Competitive Centre to review the cost of production as it seeks to cut the price of Kenyan tea at the international markets.

READ: Tea prices dip after rising at weekly auction

The directorate wants to reduce the cost of production by 10 per cent in the coming few years with a view to lowering the cost of tea abroad.

Besides Kenya, other Eatta member countries include Uganda, Tanzania, Rwanda, Burundi, DR Congo, Malawi, Madagascar Mozambique and Ethiopia.