Kebs' standards levy a big blow to Kenya's flower industry

Kenyan floriculture industry, a jewel in the country’s agricultural crown, is once again staring down a policy decision that threatens to stifle its growth, erode competitiveness and punish it for its success.

The imposition of the new 2 per cent Standards Levy by the Kenya Bureau of Standards (Kebs), applied uniformly to “manufacturers,” including flower exporters is misguided, disproportionate and economically damaging. 

Kenya’s flower industry is not in the business of manufacturing but of agriculture. Its products are grown, not fabricated. Yet, by a flawed interpretation of “value addition,” floriculture exporters who clean, grade, bunch, pack and refrigerate fresh-cut flowers for export are lumped into the same category as steelmakers, cement factories and beverage bottlers.

This conflation is not only technically wrong; it is strategically dangerous.

First, the floriculture sector is already one of the most heavily regulated agricultural sub-sectors in Kenya. From Kenya Plant Health Inspectorate Service (Kephis) inspections and Pest Control Products Board (PCPB) oversight, to taxation under the Horticultural Crops Directorate and VAT compliance with the Kenya Revenue Authority, flower farms operate under a multi-layered compliance regime.

To add yet another levy without consultation, clarity, or regard for sector-specific realities is to further burden an industry already carrying more than its fair share.

Second, the 2 per cent levy on gross sales, not profit, is deeply punitive. For flower exporters operating on thin margins in volatile global markets, gross turnover is a poor basis for taxation. Unlike manufacturers who may achieve economies of scale, exporters must navigate fluctuating freight costs, currency risk, weather-related crop losses, and strict international compliance requirements.

This new charge cuts directly into working capital—money that would otherwise be used to pay wages, invest in sustainability, and expand market access.

Consider this: A mid-sized flower exporter with Sh500 million in annual turnover would now be expected to pay Sh10 million annually in standards levies—regardless of whether they turn a profit or not. At a time when VAT refunds are delayed for years and air freight costs remain stubbornly high, this is not just unfair—it is unsustainable.

Third, Kebs has offered no clear justification or value proposition for the levy as applied to the flower sector. What standards, precisely, is it enforcing in floriculture that are not already governed by Kephis, PCPB, or market-driven certifications like KFC Silver and Gold, GLOBALG.A.P., MPS and Fairtrade?

Flower farms already meet the highest global quality and sustainability standards—not because Kebs tells them to, but because the market demands it.

Imposing a levy without corresponding service delivery is akin to taxation without representation. Moreover, this levy contravenes the spirit of public participation and regulatory consultation as enshrined in the Constitution.

The floriculture sector was not adequately consulted in the formulation of this regulation, nor offered the chance to make its case, to explain its unique production model, or to suggest a more tailored approach.

This undermines trust in regulatory institutions and sets a dangerous precedent for arbitrary policymaking. Beyond the Standards Levy, floriculture enterprises are increasingly caught in a web of layered charges. County cess fees, export levies, phytosanitary certification costs, water usage rates, and licensing fees from various environmental and trade bodies all compete for a share of growers’ margins.

Each levy may appear reasonable in isolation, but together they paint a troubling picture of fiscal overreach and regulatory incoherence. Exporters argue that this death by a thousand cuts has turned Kenya’s comparative advantage into a regulatory disadvantage.

Investment decisions are being deferred, reinvestment scaled back, and expansion projects shelved—all to absorb recurrent costs that show little alignment with sectoral growth strategies.

As rival floriculture hubs in Ethiopia and Colombia streamline their export models and slash bureaucratic red tape, Kenya’s growers are stuck negotiating an increasingly hostile operating environment. 

Buyers from Europe and Asia who prize consistency, quality, and efficiency may begin diverting orders toward more cost-effective supply chains. If unchecked, this erosion of competitiveness will not only hurt exporters but also jeopardise Kenya’s position as a global leader in cut flower exports.

This reason, Kebs must rescind or suspend the application of the standards levy to floriculture until a full regulatory impact assessment is conducted, with the participation of industry stakeholders.

Second, the government must clarify that basic agricultural post-harvest handling does not constitute manufacturing, and therefore should not be subjected to levies designed for factories.

Finally, any levy must be tied to measurable service delivery. If Kebs intends to support the industry, it must do so with tangible, value-adding services—not with blanket taxation.

Kenya’s flower industry is not asking for exemptions or special treatment. It is asking for fairness, accuracy, and respect for its role in the national economy.

An industry that employs over 200,000 people, earns over Sh100 billion in export revenue annually, and carries the Kenyan brand to global markets deserves a policy environment that enables, not penalises its growth.

Let us not allow an ill-conceived levy to choke the very blooms that uplift our rural economies, earn our foreign exchange, and put Kenya on the global map.

Mr Tulezi is chief executive officer, Kenya Flower Council