By Benadeta Mwaura - Reporter
Kenya, May 19, 2026 - Kenya’s business community is warning that proposed amendments to the Tobacco Control Act could unintentionally fuel illicit tobacco trade, threaten thousands of jobs and deepen revenue losses already facing the government.
The Kenya National Chamber of Commerce and Industry (KNCCI) says the proposed Tobacco Control (Amendment) Bill currently before Parliament could create a thriving black market worth more than Sh12 billion if implemented without broader industry consultations.
The proposed legislation, sponsored by Senator Catherine Mumma, seeks to tighten regulation around tobacco and nicotine products, including stronger controls on flavored products, electronic cigarettes and nicotine pouches. The bill also proposes stricter packaging rules, periodic tax reviews and tougher restrictions on the sale and importation of tobacco products.
However, KNCCI argues that some of the proposed restrictions could push consumers toward illegal and unregulated products entering the Kenyan market through smuggling networks.
“The unintended consequence of overregulation is the growth of illicit trade,” KNCCI warned, arguing that excessive restrictions may hurt legitimate businesses while strengthening underground markets.
The chamber estimates Kenya already loses billions of shillings annually through illicit cigarette trade, tax evasion and counterfeit tobacco products, a situation that could worsen if legal manufacturers and distributors become overburdened by regulation.
Industry players say the tobacco sector supports thousands of farmers, distributors, retailers and informal traders across the country, especially in tobacco-growing regions such as Migori, Bungoma and parts of Eastern Kenya.
The concerns emerge at a sensitive moment for Kenya’s economy, with the government aggressively seeking to widen its tax base while also battling rising illicit trade in multiple sectors including fuel, alcohol and counterfeit goods.
According to previous reports by traders and industry groups, illicit tobacco products have increasingly penetrated Kenyan markets through porous borders and unregulated supply chains.
Earlier this year, traders in Mombasa warned that aspects of the Tobacco Control Amendment Bill risked “hurting businesses” and encouraging illegal supply channels instead of eliminating tobacco consumption.
The proposed amendments come as governments globally tighten tobacco regulations amid growing public health concerns, especially around vaping products, flavored nicotine products and electronic cigarettes which have become increasingly popular among younger users.
More from Kenya
Kenya has in recent years strengthened its anti-tobacco measures under the World Health Organization Framework Convention on Tobacco Control (FCTC), including crackdowns on shisha, flavored e-cigarettes and illicit nicotine products.
Last year, Health Cabinet Secretary Aden Duale oversaw the destruction of 5.5 tonnes of seized illicit tobacco-related products, including shisha, gutkha and flavored electronic cigarettes, as part of Kenya’s anti-illicit trade campaign.
The Ministry of Health has consistently defended tighter tobacco regulation as necessary to protect public health and reduce long-term healthcare costs linked to smoking-related illnesses such as cancer, respiratory disease and cardiovascular complications.
Under the proposed amendments, the government would also gain expanded powers to regulate nicotine products and enforce stricter compliance standards for manufacturers, importers and distributors.
The bill further proposes regular tax reviews aimed at aligning tobacco taxation with inflation and public health objectives.
But business groups argue that increasing taxes and restrictions too aggressively may have the opposite effect by making legal products unaffordable while creating opportunities for smuggled and counterfeit products to dominate the market.
This debate mirrors a wider global challenge where governments are increasingly balancing public health priorities against economic concerns and the risk of expanding black markets.
The tobacco industry remains one of Kenya’s heavily taxed sectors and contributes billions of shillings annually in excise duty, VAT and corporate taxes. Critics of the proposed law now fear that if illicit trade expands further, government revenues could actually decline despite stricter legislation.
The KNCCI is now calling for wider stakeholder consultations before the bill progresses further in Parliament, insisting that regulation should protect public health without destabilizing legitimate businesses or empowering illegal trade networks.