The
government is planning to reduce Value Added Tax (VAT) on horticulture inputs
from 16 per cent to 8 per cent in a move aimed at lowering production costs and
enhancing the competitiveness of Kenya’s flower industry.
Investments,
Trade and Industry Cabinet Secretary Lee Kinyanjui said the proposed tax
reduction is part of efforts to address challenges facing flower growers and
exporters, including high air freight costs, limited cargo capacity, delayed
VAT refunds, taxes, levies and market access barriers.
Speaking
during the official opening of the 13th International Flower Trade Exhibition
(IFTEX) 2026, Kinyanjui said the concerns raised by the industry are legitimate
and require practical, long-term solutions.
“As
government, we are listening, and we are committed to working with the industry
to find practical and lasting solutions,” he said.
The VAT
applies to horticulture inputs such as fertilisers, chemicals and machinery
used in flower production. Growers have long raised concerns over delays in VAT
refunds, with the government currently owing flower farmers more than Sh10
billion accumulated over the years.
While
the Ministry has proposed reducing VAT from 16 per cent to 8 per cent, players in
the flower value chain have been pushing for the inputs to be zero-rated.
Kinyanjui
said the government will continue engaging relevant institutions to improve the
efficiency of VAT refunds, streamline regulations, reduce unnecessary
compliance costs, strengthen logistics infrastructure and expand market access
opportunities for Kenyan products.
“These
measures are aimed at ensuring Kenya remains one of the most competitive
destinations for floriculture investment and trade,” he said.
He noted
that the global flower market is changing rapidly, with consumers increasingly
demanding proof that products are sustainably produced, while retailers are
requiring greater traceability and compliance with environmental standards.
“Governments
are introducing new environmental and sustainability regulations, while buyers
are looking for partners who can consistently meet high standards while
maintaining reliability and quality,” he said.
Kinyanjui said Kenya is Africa’s largest flower exporter, one of the world’s leading exporters of roses and a trusted supplier to markets across Europe, the United Kingdom, the Middle East and Asia.
The floriculture industry, he added, has
become a symbol of Kenyan excellence, resilience and competitiveness on the
global stage.
The sector generates about Sh110 billion annually in export earnings, employs more than 200,000 people directly and supports millions of livelihoods across the country.
More than half of the workforce in Kenya’s flower farms are women,
making the industry a significant driver of economic empowerment.
The CS
said growers and exporters have recently faced rising air freight costs,
increased prices of critical agricultural inputs, logistical disruptions and
growing compliance costs linked to new market requirements.
“Our
flower industry is globally respected for ethical production, sustainability
leadership, environmental stewardship and traceability systems,” he said.
He
stressed that sustainability must be a shared responsibility across the value
chain. If growers are expected to continue investing in higher standards,
climate resilience, responsible production systems and compliance with
increasingly demanding market requirements, these efforts must be matched by
realistic and sustainable pricing.
Kinyanjui
said the future of floriculture will be defined not only by production volumes
but also by innovation, sustainability, resilience and partnership.
Christine
Chesaro, Director of Horticultural Crops at the Horticultural Crops Directorate
(HCD), said Kenya’s horticulture industry remains one of the country’s leading
foreign exchange earners and a major contributor to employment, rural
livelihoods and economic development.
In 2025,
Kenya exported 457.7 thousand tonnes of horticultural produce valued at
Sh143.78 billion. Cut flowers accounted for 55 per cent of this value,
reaffirming floriculture as the leading sub-sector within Kenya’s horticulture
industry. Fruits accounted for 30 per cent, while vegetables contributed 15 per cent.
“Our
country continues to rank among the world’s leading exporters of cut flowers,
reaching 143 international destinations in 2025,” said Chesaro.
Export
earnings from cut flowers rose from Sh72.1 billion in 2024 to Sh81.3 billion in
2025, while export volumes increased from 102.5 thousand tonnes to 130.6
thousand tonnes during the same period.
She
noted that the European Union remains Kenya’s principal market, with the
Netherlands serving as the main destination through the Aalsmeer Flower Auction
and direct retail channels.
Other
key markets include the United Kingdom, Germany, Australia, Kazakhstan,
countries in the Middle East and emerging destinations across Europe, Asia and
Africa.
“To
remain competitive, the sector must continue investing in innovation,
sustainability, quality assurance and market diversification,” said Chesaro.
