Kenya: Govt Defends Sh104mn Tax Waiver On Imported Industrial Sugar

What the report says

AllAfrica, carrying a Capital FM report from Nairobi dated July 22, 2026, reported that Kenya’s National Treasury has defended a tax exemption on imported raw sugar, saying the measure is meant to support domestic manufacturing even though it reduced expected revenue by more than Sh104 million. Treasury Cabinet Secretary John Mbadi appeared before the National Assembly’s Departmental Committee on Trade, Industry and Co-operatives to explain the decision.

According to the report, the Kenya Revenue Authority waived Sh104.09 million for Mombasa Sugar Refinery Limited after the company was exempted from paying the Import Declaration Fee and Railway Development Levy on raw sugar brought in for industrial processing. The exemption was made under East African Community Legal Notice No. EAC/92/2025. Treasury said Sh57.83 million related to the Import Declaration Fee, while Sh46.26 million was tied to the Railway Development Levy.

The waiver is drawing parliamentary attention as lawmakers review tax incentives given to private companies at a time when the government is seeking to raise more revenue. Treasury told the committee that it weighed the immediate fiscal loss against expected public benefits, and argued that the exemption was limited and conditional rather than an open-ended concession.

The ministry said the policy could support jobs, technology transfer, use of local refining capacity and value addition in Kenya’s sugar sector. It also said expanding local output of industrial sugar could reduce dependence on imported finished sugar used by pharmaceutical, confectionery and beverage manufacturers, while potentially strengthening Kenya’s role as a regional supplier.