Kenya is advocating a coordinated regional approach to tobacco taxation within East Africa, arguing that large differences in cigarette excise duties across neighbouring countries are fuelling smuggling, undermining public health efforts and eroding government revenues.
Consumer advocacy groups, including the National Taxpayers Association and the Kenya Tobacco and Nicotine Tax Coalition, have urged East African Community (EAC) member states to harmonise tobacco taxes as Kenya considers major increases in excise duties on tobacco products.
The call comes as lawmakers debate the Finance Bill 2026 and the Tobacco Control (Amendment) Bill 2024, proposals that could significantly increase tobacco taxation and tighten regulation of nicotine products.
According to the groups, widening tax disparities between countries are encouraging illicit cross-border trade as smugglers source cheaper tobacco products from lower-tax jurisdictions and sell them illegally in higher-tax markets.
“Without regional tax harmonisation, illicit trade will continue to thrive because smugglers will always follow the lowest-tax route,” said Patrick Nyangweso.
The organisations are urging a coordinated approach involving Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan and the Democratic Republic of Congo.
Under proposals submitted to parliament, the National Taxpayers Association wants cigarette excise taxes increased by 30 percent annually over the next five years, raising the rate from the current 4,100 Kenyan shillings per 1,000 cigarettes to about 15,124 shillings by 2029.
The group also wants tobacco taxes automatically indexed to inflation and income growth to prevent their real value from being eroded over time.
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Kenya currently taxes tobacco products at about 30.6 percent of retail price, well below the 75 percent level recommended by the World Health Organization.
Public health advocates argue that higher tobacco taxes are among the most effective tools for reducing smoking rates while generating additional government revenue.
According to industry estimates cited by the groups, tobacco use contributes to approximately 12,000 deaths annually in Kenya and is a major risk factor for cancer, cardiovascular diseases and chronic respiratory illnesses.
The economic impact is also substantial. Consumer groups estimate that tobacco use cost the Kenyan economy between US$544 million and US$756 million in 2021 through healthcare expenditure, lost productivity and reduced household incomes.
At the same time, tobacco remains an important cash crop in several counties, including Migori, Homa Bay, Bungoma and Kisumu, supporting thousands of farming households.
To address concerns about farmer livelihoods, the National Taxpayers Association has proposed establishing a Tobacco Transition Fund financed by one percent of annual tobacco excise revenues. The fund would support crop diversification into alternatives such as sunflower, soya beans, sorghum and horticulture.
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The debate has also highlighted concerns over emerging nicotine products, including e-cigarettes and nicotine pouches, which advocates say are growing in popularity among young consumers while remaining comparatively lightly taxed.
The proposed Tobacco Control (Amendment) Bill 2024 seeks to expand the legal definition of tobacco products to include newer nicotine products and extend advertising restrictions and health warning requirements.
Advocacy groups are also calling for stronger enforcement measures, including full implementation of Kenya’s Excisable Goods Management System and the creation of a dedicated multi-agency task force to combat illicit tobacco trade.
They further want East African countries to strengthen implementation of the WHO Protocol to Eliminate Illicit Trade in Tobacco Products, arguing that countries that have enforced the agreement have seen reductions in smuggling while maintaining strong tax revenues.
The proposals come as Kenya seeks to increase domestic revenue mobilisation and address public health challenges while balancing concerns over illicit trade, farmer livelihoods and the rapid evolution of nicotine products across the region.
