By Kimuri Mwangi
A survey conducted by the Global Alliance for Improved Nutrition (GAIN) in partnership with Agile Consulting has revealed a fragmented and often burdensome system of taxes and levies imposed on food across six counties in Kiambu, Machakos, Nakuru, Nyandarua, Nairobi, and Mombasa.
Focusing on key value chains including vegetables such as kales, spinach, tomatoes, onions, carrots, avocado, Irish potatoes, garden peas, dairy, poultry, as well as fruits and other perishable produce, the study draws on key informant interviews (KIIs), focus group discussions (FGDs), desk reviews and field observations. It captures perspectives from county government officials in agriculture, trade, finance, and health/nutrition, alongside farmers’ and traders’ associations, transporters, and consumers.
The central objective was not only to identify the various taxes and levies, but also to assess their real-world impact on food affordability, business operations and governance systems.
The survey points to weak public participation structures, despite provisions under the County Finance Acts. Engagement processes are described as poorly structured and inconsistently implemented, with forums often combining multiple sectors, thereby limiting meaningful input from agriculture stakeholders. In addition, many participants lack a technical understanding of tax frameworks, reducing the quality of feedback. As a result, taxation policies are frequently developed without sufficient grounding in value chain realities.
Limited awareness and stakeholder exclusion further compound the problem. A significant number of farmers, traders and transporters reported low awareness of taxation policies and minimal understanding of how levies are determined or revised. This has led to passive compliance rather than active engagement and reduced accountability in county decision-making. Although there have been some improvements in inclusion, particularly among women and youth following recent civic mobilisation trends, participation remains uneven, not institutionalised, and vulnerable groups continue to be underrepresented in fiscal decision-making.
The survey also highlights perceptions of political influence, with some public participation exercises viewed as procedural rather than substantive, and outcomes seen as pre-determined by political or revenue targets. This has weakened trust in county governments, contributing to resistance or non-compliance among traders and limiting the uptake of reform initiatives such as tax harmonisation.
Differences in taxation regimes across counties further reflect inter-county political fragmentation, driven by a lack of coordinated political leadership and competition for revenue rather than collaboration for food system efficiency. This fragmentation disrupts inter-county trade and creates policy uncertainty for traders operating across borders.
On the legal front, the study identifies ambiguity in taxation mandates. While the Constitution allows both national and county governments to impose taxes, legal boundaries, particularly around Agricultural Produce Cess (APC), remain unclear, with overlaps between national fees and county levies. This results in double taxation, especially at border points and along transit routes, and creates legal uncertainty for actors across the value chain.
The absence of harmonised frameworks is another major concern. Tax rates, structures and collection mechanisms vary widely between counties, with some charging per bag, others per vehicle or tonnage, and others imposing daily market fees. This inconsistency creates confusion among traders and opens the door to exploitation and arbitrary enforcement.
Enforcement and compliance systems also remain weak. Despite ongoing digitisation efforts, manual collection systems are still widely used, and enforcement varies depending on location and personnel. This has led to informal payments, revenue leakages, discrepancies between official rates and actual charges, and reduced efficiency in county revenue collection.
A critical legal gap lies in revenue accountability. The study notes the absence of a binding framework to ensure that collected taxes are reinvested in agriculture. Following the repeal of earlier legislation, the requirement to reinvest a significant portion of cess revenue is no longer enforceable. Consequently, funds are absorbed into general county revenue, leaving agricultural stakeholders with little direct benefit.
Although harmonisation efforts led by the Council of Governors (CoG) have introduced measures such as single-payment systems and attempts to standardise cess, implementation remains inconsistent. Counties such as Nakuru and Nyandarua have made progress, while others continue to lag.
Economically, the study documents layered taxation across the value chain, with charges applied at the farm gate, during transport at checkpoints and cess barriers, at market entry, and during offloading and trading. Common charges include Agricultural Produce Cess, daily or monthly market fees, transport and vehicle-based levies, offloading and handling charges, as well as hawking and licensing fees. Together, these create a cascading cost effect.
The cumulative burden of these taxes has driven up both wholesale and retail food prices, while also increasing the cost of transporting perishable goods. According to the survey, consumer purchasing power has declined by up to 50 percent. Households are coping by buying smaller quantities and switching to cheaper, less nutritious food options, undermining nutrition outcomes and food security, particularly in urban areas such as Nairobi and Mombasa.
Profitability has also been affected across the value chain. Traders report that multiple levies significantly reduce their margins, while daily fees create pressure to sell quickly, sometimes at lower prices. High costs also discourage formalisation. For farmers, taxes on inputs and distribution increase production costs, with the report estimating that a one percent increase in cess on seed distribution raises production costs by 0.2 percent. This discourages investment in quality inputs and limits expansion.
Tax-related inefficiencies are further evident in supply chains. The study highlights long delays at checkpoints and markets, system failures in digital payment platforms, and congestion at key trading hubs. In Mombasa, for instance, offloading delays can reach up to eight hours. For perishable goods, such delays translate into post-harvest losses, reduced product quality and lower market value.
Differences in tax regimes across counties also undermine competitiveness. Traders often avoid certain routes or markets due to high levies, leading to reduced inter-county trade, fragmented markets and increased reliance on imports, particularly in urban centres.
Despite significant revenue collection, reinvestment into food systems remains low. The study notes that only a small proportion of funds is channelled back into agriculture, with reinvestment as low as 10 percent in Nairobi and Machakos, and relatively higher, but still insufficient, in Nyandarua. This limits the development of infrastructure such as markets, storage facilities and roads, as well as extension services and input subsidies. Stakeholders widely view this as a major inequity within the system.
Across all six counties, the study consistently identifies a multiplicity of uncoordinated taxes, weak governance and accountability systems, a disproportionate burden on small-scale actors, and a negative impact on food affordability and nutrition.
Overall, the GAIN–Agile Consulting survey paints a picture of a taxation system that is politically fragmented, legally inconsistent and economically burdensome. Rather than supporting agricultural growth and food security, the current structure raises the cost of food, discourages production and trade, and limits access to nutritious diets.
While reforms such as digitisation and cess harmonisation show potential, their partial and uneven implementation continues to limit their effectiveness. The findings underscore the need for stronger inter-county coordination, clearer legal frameworks, transparent reinvestment mechanisms and more inclusive, meaningful public participation. Without such changes, taxes and levies will remain a systemic barrier to affordable, safe and nutritious food across the surveyed counties.
