Kenya calls on Tanzania to withdraw new discriminatory tax measures as it threaten regional trade gains
NAIROBI, Kenya, July 31 – The government has formally expressed concern over recent tax and business licensing measures introduced by Tanzania, warning that the changes could undermine regional trade integration within the East African Community (EAC).
Cabinet Secretary for Investments, Trade and Industry, Hon. Lee Kinyanjui while addressing the media cited new excise duties and licensing restrictions introduced under Tanzania’s Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019, which impose Industrial Development Levy and excise duty rates of 10% and 15% respectively.
Tanzania’s recently gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, prohibits non-citizens including EAC nationals from operating in 15 service sectors, including micro and small industries.
“The order, which came into immediate effect, includes stiff penalties for non-compliance, though existing license holders are exempt tese measures threaten to reverse hard-won regional trade gains,” said CS Kinyanjui.
Tanzania ranks as Kenya’s second-largest trading partner within the EAC, with intra-community trade worth Ksh. 63 billion in 2024, While acknowledging Tanzania’s sovereign right to legislate domestic policies, Kinyanjui emphasized that such policies must align with EAC commitments.
“The measures taken by Tanzania are substantive and undermine the core objective of regional economic integration under the EAC Common Market Protocol (CMP),” he said.
Kenya is calling on Tanzania to withdraw the restrictions and return to the provisions of the EAC Protocol, which guarantees non-discriminatory treatment for EAC citizens in matters of trade and investment.
The CS warned that Business Licensing Order appears to criminalize legitimate EAC investments and risks damaging both economies, He urged a return to dialogue and cooperation in the spirit of EAC unity.
The Cabinet Secretary revealed that Kenya has been actively engaging in consultative forums to resolve the issue. Notably, during the 1st Extra-ordinary Sectoral Council on Finance and Economic Affairs (SCFEA) member states directed the EAC Secretariat to compile a list of excise duties, levies and charges that violate the Customs Union Protocol.
The report is expected by August 30, 2025. Further, the EAC Secretariat has been tasked with aligning national definitions of “import” and “export” in line with regional standards by June 30, 2025 and convening a compliance-focused second SCFEA by September 30 2025.
Kenya and Tanzania have also scheduled bilateral meetings, including a technical meeting on tobacco trade (August 4–5 in Arusha) and a Joint Trade Committee session to review levies and fees (August 11–12).
“We are optimistic these engagements will yield positive results grounded in the foundational EAC principles of free movement of goods, people, services, labour and capital,” said Kinyanjui.
The CS reaffirmed Kenya’s commitment to a unified East African Community under the banner of “One People, One Destiny,” guided by fairness, transparency and mutual respect.
