Agriculture and Livestock Development Cabinet Secretary Sen. Mutahi Kagwe has announced sweeping new government interventions for agricultural exporters, to be anchored in the Finance Bill 2026 that will be tabled in Parliament in March, in a major boost for Kenya’s export-led growth strategy.
Speaking during the official launch of the Flamingo Group Investments (FGI) Expansion Project in Naivasha, Kagwe said the new measures are designed to unlock reinvestment, protect jobs and restore exporter confidence after years of cash-flow pressure caused by delayed VAT refunds, high levies and rising logistics costs.
“We are fixing the exporter ecosystem deliberately and permanently. The Finance Bill 2026 will ensure that exporters of agricultural produce are competitive, liquid and able to reinvest in Kenya,” Kagwe said.
The Cabinet Secretary revealed that the Finance Bill 2026 will introduce targeted tax and regulatory relief for exporters of agricultural produce, including:
- Reduction of input VAT from 16% to 8% for exporters
- Removal of excise duty on packaging materials, including kraft paper, used by agricultural exporters to eliminate unnecessary domestic taxes on export inputs
- Removal of export promotion levies
- Removal of excise duty and export promotion levies on packaging materials, including kraft paper.
- Faster offsetting of VAT refunds against future tax liabilities
- Special treatment for long-standing 100% exporters to operate like EPZs and SEZs, eliminating VAT on local purchases
- Rationalisation of regulatory levies
- Expanded air freight capacity through Kenya Airways and new international carriers, including Turkish Airlines
The reforms are expected to unlock billions of shillings in stalled exporter capital and accelerate reinvestment in horticulture, tea, coffee, fresh produce and livestock value chains.
The announcement coincided with Flamingo Group’s launch of a KSh 2 billion expansion programme, involving annual investments of KSh 644 million for the next three years, the creation of 500 new direct jobs, and expanded value-added bouquet production for export to Europe and the UK.
Flamingo Horticulture Kenya currently employs over 12,000 Kenyans directly and supports 6,000 more jobs in its supply chain, exporting more than 750 million flower stems annually to global markets. Kenya exports an estimated six million roses every day, making the sector one of the country’s biggest foreign exchange earners.
Kagwe acknowledged the long-standing VAT refund backlog that has affected exporters, citing Flamingo’s KSh 1.8 billion outstanding refund balance. He confirmed that KSh 470 million has already been disbursed, with further payments scheduled.
“These refunds are not losses to government. They are reinvestment capital for farms, jobs and technology,” he said.
The reforms were reinforced by Principal Secretary for Investment Promotion, Mr. Abubakar Hassan Abubakar, who said the government is fully aligned in removing bottlenecks that undermine investor confidence.
“Kenya’s competitiveness depends on how fast we convert policy into action. Exporters are central to our growth story, and we will support them,” Abubakar said.
The event drew senior government officials, regulators, industry leaders and diplomats, including the Acting British High Commissioner, His Majesty’s Trade Commissioner, Invest Kenya leadership, KEPHIS, KEPROBA, and exporter associations.
Kagwe said the Flamingo investment demonstrates the success of the government’s reform agenda under the Bottom-Up Economic Transformation Agenda, which positions agriculture as a modern, export-driven industry.
“When exporters reinvest in Kenya, communities grow, jobs multiply, and the economy strengthens. That is the Kenya we are building,” he said.
With the Finance Bill 2026 set for debate in Parliament in March, the government expects the new exporter interventions to accelerate rural industrialisation and cement Kenya’s position as Africa’s horticultural powerhouse.