Kenya has vehemently protested Tanzania’s recently enacted business licensing regulations and tax measures, labeling them as discriminatory and a direct threat to regional economic integration. The contentious policies which include new excise duties, an Industrial Development Levy, and a ban on non-citizens from engaging in 15 categories of businesses have sparked fears of a potential trade war between the two economic powerhouses.
The Ministry of Investments, Trade and Industry (MITI) in Kenya expressed “deep concern” over Tanzania’s Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019, which impose excise duties and an Industrial Development Levy at rates of 10% and 15% respectively.
Even more contentious is Tanzania’s newly gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, effective July 28, which explicitly prohibits non-citizens from sectors such as mobile money transfers, electronics repair, salon operations, tour guiding, and ownership of micro and small industries.
Trade Cabinet Secretary Lee Kinyanjui minced no words in his condemnation. “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,” Kinyanjui stated. He emphasized that the measures directly undermine commitments made under the EAC Common Market Protocol, particularly Article 13, which guarantees non-discriminatory treatment among citizens of member states regarding business establishment and operation.
Trade Cabinet Secretary Lee Kinyanjui
Kinyanjui warned of severe economic repercussions, stating, “The Business Licensing Order, which seems to be criminalizing lawful EAC investments, will hurt both our economies.” He urged Tanzania to remove the restrictions and revert to the provisions of the EAC protocol, stressing the importance of bilateral engagements to resolve the issues in the spirit of the East African Community.
The Tanzanian order carries hefty penalties for non-citizens found operating in the prohibited sectors, including fines of not less than TSh10 million (approximately Sh505,800), imprisonment for up to six months, and potential visa revocation. Tanzanians aiding non-citizens in breaching the order also face fines or imprisonment.
Despite acknowledging Tanzania’s sovereign right to legislate, Kenya insists on consultation and coordination on matters affecting cross-border trade. Kenya is now banking on diplomacy, proposing enhanced bilateral talks, technical meetings, and joint sectoral council sessions. A technical meeting on tobacco trade is slated for August 4–5 in Arusha, followed by a Joint Trade Committee session on August 11–12 to review levies, fees, and charges imposed by both countries.
The EAC Secretariat has also been tasked with compiling a list of tax measures by member states that may contravene the Customs Union Protocol, with a report due by August 30. “We are therefore positive that these engagements will yield positive results grounded on the foundational principles of the EAC, including the free movement of goods, people, services, labour and capital,” Kinyanjui concluded, reiterating Kenya’s commitment to regional unity.
