Agriculture plays a central role in Kenya’s economy, employment, and food security; yet its contribution to tax revenue remains relatively low. This study examines agricultural taxation in Kenya, focusing on tax design, incentives, exemptions, and recent policy reforms, and situates Kenya’s experience within a broader international context. Using a qualitative policy analysis and comparative institutional approach, the study reviews finance laws, tax legislation, VAT regulations, and policy documents from the 1990s to 2025. The analysis reveals that Kenya has heavily relied on VAT exemptions and the reclassification of agricultural inputs to protect farmers and maintain food prices. However, the shift from zero rating to exemption has increased embedded tax costs along agricultural value chains, raising production costs without improving revenue performance. The findings further indicate that tax incentives and compliance tools are not neutral, as they tend to favor larger and more formal agribusiness firms while increasing cost pressure on small-scale farmers. Administrative reforms such as withholding tax proposals and digital tax systems have improved visibility but also risk encouraging informality when compliance costs rise without clear benefits. Comparative evidence from the European Union, the United States, China, Brazil, Uganda, and Tajikistan confirms that effective agricultural taxation depends more on tax design, predictability, and institutional capacity than on higher tax rates. The study concludes that Kenya’s current approach creates a structural conflict between revenue mobilization and agricultural sustainability. Policy reforms should shift toward more transparent, predictable, and targeted tax instruments that support productivity, safeguard food security, and enhance long-term revenue stability.