A new chapter has begun for Kenya’s long-troubled sugar industry as the Sugar Development Levy (SDL) came into effect on July 1, 2025, introducing a structured funding mechanism to support sector-wide reform.
- •Under the new framework, sugar millers are now required to pay 4% of the ex-factory price for all locally produced sugar sold, and the same rate for imported sugar calculated on the Cost, Insurance, and Freight (CIF) value of each shipment.
- •The Kenya Revenue Authority (KRA) has been appointed as the official collection agent and is expected to release detailed compliance guidelines in the coming days.
- •Levy payments are due by the 10th of the month following the sale or the month of import.
- •The SDL is a key provision of the Sugar Bill 2022, signed into law by President William Ruto in November last year. The legislation seeks to breathe life into an industry that has faced decades of inefficiency, mismanagement, and underfunding.
At the heart of the reforms is the re-establishment of the Kenya Sugar Board (KSB)—tasked with regulating, developing, and promoting the sugar sector. The Board will oversee licensing, pricing, policy collaboration, and market surveillance, while also deploying crop inspectors to enforce compliance across the value chain.
Complementing this is the Kenya Sugar Research and Training Institute, designed to lead research and innovation in sugar production. A nine-member board, chaired by a Cabinet Secretary appointee, will guide its operations.
Dispute resolution will also get a boost with the formation of a Sugar Arbitration Tribunal, comprised of five members and chaired by a judge-qualified official. It will resolve conflicts within 90 days, with appeal options available up to the Court of Appeal.
The Sugar Development Levy revenue will be strategically allocated 40% for cane productivity, 15% each for factory development, research, and infrastructure, 10% for KSB administration and 5% for sugarcane farmers’ organisations.
As KRA prepares to roll out collection procedures, stakeholders across the industry are bracing for a new, reform-driven era. The costs of the levy are likely to be borne by consumers, as millers and importers move to protect margins while navigating the new era.
