High taxes blamed for dampening Kenya's global competitiveness
High taxes on tea produced and exported from Kenya are adding to spiraling production costs and risk hurting its competitiveness on the international markets. The East African Tea Trade Association claims the industry is overburdened by up to 35 different taxes and levies at all stages of the value chain thus making the final product uncompetitive compared to neighboring countries and other top producers. For example, 95% of tea produced in Kenya is exported and traders pay a 1% "ad valorem" tax on those exports to fund research and infrastructure. They also claim that local consumption, which could shield the industry from volatility on international markets, is stagnating due to a 16% Value Added Tax.