NAIROBI, Kenya— Kenya has called for constructive dialogue with Tanzania following the introduction of new tax and business licensing measures that could significantly impact cross-border trade within the East African Community (EAC).
Tanzania’s recent enactment of the Finance Act 2025 and amendments to its Excise (Management and Tariff) Act 2019have raised concerns in Nairobi.
These changes introduce additional excise duties and an Industrial Development Levy of 10% and 15%, respectively, charges Kenya views as potentially disruptive to regional commerce.
Further raising eyebrows is Tanzania’s new Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which restricts foreign nationals, including EAC citizens, from participating in 15 types of business activities.
While existing license holders are exempt, the order is already in effect and comes with heavy penalties for non-compliance.
Cabinet Secretary for Investments, Trade and Industry Lee Kinyanjui, noted that while Kenya respects Tanzania’s sovereign right to legislate, such decisions should align with the spirit of regional cooperation.
“We believe in the importance of coordination and consistency when implementing policies that affect intra-EAC trade,” he said.
Tanzania is Kenya’s second-largest trading partner in the EAC, with goods worth Sh63 billion exchanged in 2024.
The broader EAC bloc accounts for over a quarter of Kenya’s exports.
Kenya has been actively engaging regional partners to address the issue.
During the 1st Extraordinary Sectoral Council on Finance and Economic Affairs, which Kenya participated in, the EAC Secretariat was tasked with compiling a list of member-state tax measures that conflict with the Customs Union Protocol.
A report is expected by August 30, 2025.
Bilateral efforts are also underway.
A technical meeting on tobacco trade will be held in Arusha on August 4–5, followed by a Joint Trade Committee meeting from August 11–12 to review and harmonize levies and fees.
