Nairobi: The Kenya Revenue Authority (KRA) has revised its customs valuation benchmark to Sh3.2 million, a move aimed at closing loopholes and safeguarding compliant traders from unfair competition. The new benchmark, which took effect on August 20, was established after consultations with the Kenya International Freight and Warehousing Association (KIFWA), small traders, cargo consolidators, and other private-sector stakeholders.
According to Kenya News Agency, KRA’s revised threshold is designed to enhance customs valuation, protect government revenue, and ensure a level playing field for businesses accurately declaring their goods and paying the necessary taxes. Cargo consolidation remains a vital channel for small traders to import goods by combining shipments into a single container, thereby reducing the cost of international trade.
However, KRA has noted that this arrangement has sometimes been exploited through undervaluation, under-declaration, misdescription, misclassification, and concealment of high-value goods. Such practices have led to revenue losses and given non-compliant businesses an artificial cost advantage. High-value electronics, particularly smartphones, have been cited as commodities affected by these practices, with instances where high-end phones are misdeclared as lower-value models to reduce customs value and payable taxes.
KRA emphasized that the Sh3.2 million figure serves as a minimum reference point and not a flat valuation for every container. “The Sh3.2 million benchmark does not mean that every container is valued at Sh3.2 million. If the actual value of the goods is higher, that value must be declared and the correct taxes paid,” KRA stated. The benchmark aims to bolster valuation controls rather than serve as a ceiling for imported goods.
The previous benchmark of Sh2.5 million had remained unchanged for approximately six years, despite shifts in economic conditions, import values, and the types of goods entering the country. Originally agreed upon between small traders and the Government, the threshold was supposed to be reviewed upwards after one year, but this review did not occur.
The new benchmark is also expected to protect local manufacturers from unfair competition due to undervalued imports. KRA noted that inaccurately declared imports could enter the Kenyan market at artificially low prices, undermining locally manufactured goods whose producers adhere to tax and regulatory requirements.
KRA refuted suggestions that the measure indicates a dispute with small traders, emphasizing its recognition of small businesses’ economic contributions and noting that many traders and consolidators comply with customs requirements. KRA’s focus remains on addressing practices that provide certain businesses with an unfair advantage.
Traders were reminded that tax compliance extends beyond the clearance of consolidated cargo through customs. Those selling goods in commercial centers such as Eastleigh, Kamukunji, Nyamakima, and Toy Market must adhere to domestic tax obligations, including business registration, electronic invoicing where applicable, and the accurate declaration of income and taxes due.
KRA stated that compliance must encompass the entire supply chain, from importation and customs tax payment to the subsequent sale of goods in the domestic market.
