Kenya has raised concerns over a series of trade and tax policies recently enacted by Tanzania, warning that the new measures could reverse the progress made in regional integration under the East African Community (EAC) framework.

In a statement on Wednesday, the Ministry of Investments, Trade and Industry (MITI) said Tanzania’s Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019 introduced excise duties and an Industrial Development Levy of 10 and 15 percent, which Kenya believes go against the EAC Customs Union and Common Market Protocols.

The ministry also criticised Tanzania’s newly gazetted Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which bans foreigners from engaging in 15 categories of business, including ownership of micro and small industries.

While Kenya recognises Tanzania’s authority to make domestic laws, it said these sweeping measures, especially those with regional implications, should be done through consultation and in line with EAC principles.

It warned that the new policies create an unfavourable climate for cross-border trade and could harm the wider region.

“The Business Licensing Order, which seems to be criminalizing lawful EAC investments, will hurt both our economies,” said Cabinet Secretary Lee Kinyanjui, calling for the immediate withdrawal of the restrictions and a return to regional commitments.

Kenya further cited Article 13 of the EAC Common Market Protocol, which allows citizens of partner states to start and run businesses in other member states without being subjected to discrimination.

“The measures taken by Tanzania are substantive and undermine the core objective of regional economic integration under the Common Market Protocol,” read the statement.

According to MITI, Kenya has already taken steps to address the issue, including participating in the First Extraordinary Sectoral Council on Finance and Economic Affairs. The meeting directed the EAC Secretariat to prepare a list of tax and non-tax barriers across member states that violate the EAC agreements. The report is expected by August 30, 2025.

The council also instructed the Secretariat to harmonise the definitions of “imports” and “exports” across the EAC by June 30, 2025, and convene a follow-up meeting to review member compliance by September 30.

In the meantime, Kenya and Tanzania have agreed to engage directly to resolve the matters. A tobacco trade meeting is scheduled for August 4–5 in Arusha, followed by a Joint Trade Committee meeting on levies and charges from August 11–12.

“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, transfer of services, labour, and capital,” said Kinyanjui.

He reaffirmed Kenya’s commitment to the EAC vision of “one people, one destiny,” noting that transparency, fairness, and mutual respect remain central to its trade and diplomatic efforts in the region.