NAIROBI, Kenya, Jul 31 – Kenya has initiated diplomatic engagements with Tanzania over its new business licensing regime, which prohibits non-citizens from trading in fifteen key services — a move Nairobi says threatens regional trade integration and “criminalizes lawful investments.”Prime Cabinet Secretary Musalia Mudavadi on Wednesday announced that President William Ruto, in his capacity as Chairperson of the East African Community (EAC), had directly engaged Tanzanian President Samia Suluhu Hassan to address the dispute.“I have been in touch with the Minister responsible for foreign affairs on this matter. President Ruto too, as Chairperson of the EAC, is in touch with the President of Tanzania,” Mudavadi told reporters in Nairobi.Mudavadi confirmed the diplomatic intervention just hours after Trade Cabinet Secretary Lee Kinyanjui publicly faulted Dodoma’s decision to gazette the Business Licensing (Prohibition of Business Activities for Non-Citizens) Order, 2025, which restricts, among other things, the ownership and operation of micro and small industries.Kinyanjui on Wednesday confirmed that Kenya will table its concerns at a Joint Trade Committee meeting scheduled for August 11–12, a week after a technical meeting on tobacco product trade set for August 4–5 in Arusha.“Already, the 1st Extra-ordinary Sectoral Council on Finance and Economic Affairs(SCFEA) which Kenya took part, directed the EAC Secretariat to compile a comprehensive list of excise duties, levies, and charges by member states, that arecontrary to the Customs Union Protocol,” he said.The Council, he noted, had asked the regional secretariat to present a report on non-compliant duties and charges due by August 30The new order, which took immediate effect for new applicants, prescribes heavy penalties for violations, although it temporarily exempts existing license holders.‘Discriminatory’ tax measuresKinyanjui also expressed concern over Tanzania’s Finance Act 2025 and amendments to the Excise (Management and Tariff) Act 2019, which introduced excise duties and an industrial development levy at 10 and 15 percent, respectively.Kenya faults Tanzania for ‘criminalizing lawful investments’ in law targeting non-citizens“These measures are substantive and undermine the core objective of regional economic integration under the EAC Common Market Protocol (CMP),” Kinyanjui said.Kenya, he said, respects the sovereign rights of EAC Partner States to legislate on domestic matters but insists on the implementation of policies affecting cross-border trade through consultation and in line with regional commitments.Kenya warned that the restrictions risk undermining progress in intra-regional trade.The EAC remains Kenya’s largest export market, accounting for 28.1 percent of total exports valued at Sh297 billion in 2024.Tanzania is Kenya’s second-largest EAC trading partner after Uganda, with trade between the two countries estimated at Sh63 billion in 2024.