NAIROBI, Kenya — Kenya has formally protested Tanzania’s latest tax and business licensing laws, accusing its East African neighbour of breaching the East African Community (EAC) trade protocols and jeopardizing regional economic integration.
In a statement, the Ministry of Investments, Trade and Industry (MITI) expressed deep concern over Tanzania’s Finance Act 2025 and recent amendments to the Excise (Management and Tariff) Act 2019.
The new laws introduce excise duties and an Industrial Development Levy ranging between 10 and 15 per cent, which Kenya says unfairly target cross-border trade.
Even more contentious is Tanzania’s newly gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which came into effect on July 28.
The directive bars foreign nationals from operating in 15 sectors, including mobile money services, electronics repair, hair and beauty salons, tour guiding, and ownership of micro and small enterprises.
“The Government of Kenya has noted with concern the imposition of new and discriminatory tax measures by the United Republic of Tanzania, which threaten the regional trade gains,” said Cabinet Secretary Lee Kinyanjui.
Kinyanjui added that the move contravenes Article 13 of the EAC Common Market Protocol, which prohibits discriminatory treatment of citizens from member states in the establishment and operation of businesses.
“The Business Licensing Order, which seems to criminalise lawful EAC investments, will hurt both our economies,” he said. “It is therefore critical, in the spirit of EAC, that bilateral engagements be held to resolve these issues.”
Under the Tanzanian directive, any non-citizen found operating a prohibited business faces a fine of at least TSh10 million (approximately KSh505,800), a jail term of up to six months, or both.
Tanzanians who assist foreigners in contravening the order risk a TSh5 million fine or a three-month prison sentence.
While recognising Tanzania’s sovereign right to legislate, Kenya maintains that regional obligations must take precedence in matters affecting cross-border commerce.
Nairobi is now calling on Dodoma to revoke the restrictions and revert to compliance with EAC protocols.
“Kenya requests that these restrictions be removed and that Tanzania reverts to measures provided for in the EAC protocol,” Kinyanjui said.
To resolve the escalating standoff, Kenya is banking on diplomacy. The country has proposed enhanced bilateral talks, technical consultations, and joint sectoral council meetings.
A technical session on tobacco trade is scheduled for August 4–5 in Arusha, to be followed by a broader Joint Trade Committee meeting on August 11–12, where both countries will review existing trade levies and restrictions.
Additionally, the 1st Extra-Ordinary Sectoral Council on Finance and Economic Affairs (SCFEA) has instructed the EAC Secretariat to compile a comprehensive list of member state tax measures that may be in breach of the Customs Union Protocol.
The report is expected by August 30, with a compliance-focused council meeting planned for late September.
Despite the rising tensions, Kenya insists its commitment to the EAC remains unshaken.
“In line with the spirit of the EAC—‘one people, one destiny’—we are committed to upholding the principles of non-discrimination, transparency, and equity,” the ministry said.
