Kenya Finance Act 2025 exempts locally consumed teas and mosquito repellent and zero-rates tea and coffee packaging

What changed in detail

Sections 38 and 39 of the Finance Act, 2025 (No. 9 of 2025, Kenya Gazette Supplement No. 104; assented 27 June 2025; in force 1 July 2025) amend the schedules to the VAT Act, CAP 476.

First Schedule, Part I (exempt goods):

• inserts tariff 3006.93.00, placebos and blinded clinical trial kits for a recognised clinical trial;
• inserts paragraphs 155 (mosquito repellent), 156 (inputs, machinery and raw materials for its manufacture, on the health Cabinet Secretary’s recommendation) and 157 (the supply of locally consumed teas);
• deletes paragraphs 112 and 128, with exemptions already approved under them continuing until 30 June 2026, and deletes paragraph 154 (textile raw materials, added in December 2024);
• excludes fuels, lubricants and tyres for vehicles from paragraph 51; replaces paragraph 101 with all goods imported or purchased locally by the Defence Forces Welfare Services; and limits the paragraph 146 investment exemption to exemptions granted before 27 December 2024, applying only until 27 December 2025.

First Schedule, Part II (exempt services): inserts items 36 to 38, covering services to mosquito-repellent manufacturers and accommodation, restaurant, salon, laundry and other services of or for the Defence Forces Welfare Services.

Second Schedule, Part A (zero-rated): inserts paragraph 36, packaging materials for tea and coffee, on the agriculture Cabinet Secretary’s recommendation.

What it means

Several items here were dated from the start and are now spent: the paragraph 112 and 128 transitional exemptions ran out on 30 June 2026, and the paragraph 146 investment exemption ended on 27 December 2025 before the Finance Act 2026 (s.32) replaced paragraph 146 from 1 July 2026 with a new, open-ended investment exemption. The textile raw-materials exemption that the Tax Laws (Amendment) Act 2024 added lasted six months. For tea, the pairing matters: local tea sales are exempt, so producers cannot recover input VAT on them, but packaging is zero-rated, which relieves one of the main costs. Check the current schedule before relying on any item, since the Finance Act 2026 amended the First Schedule again.