08/31/2026
NAIROBI TRADERS ARE PROTESTING A KSH3.2 MILLION KRA DIRECTIVE. WHAT IS THE REAL ISSUE?
Nairobi traders took to the streets on Friday. At the centre of the protests is a KRA decision to increase the minimum amount of tax expected from a 40-foot container carrying consolidated goods from KSh2.5 million to KSh3.2 million. That is an increase of KSh700,000, or 28%.
The issue mainly affects small traders who import goods together in one container. Instead of one trader paying for an entire container, several traders combine their goods and share the shipping and clearance costs. It is a system commonly used by small businesses importing clothes, electronics, household goods and other merchandise.
KRA describes the KSh3.2 million figure as a minimum-yield benchmark. In simple terms, it is the amount of customs revenue KRA expects from a consolidated container before allowing it to move through the simplified clearance process without a more detailed assessment.
That distinction matters because, under customs law, tax is ordinarily supposed to be based on the goods actually being imported, their value and the tariff that applies to them. KRA also has the power to inspect goods, question declared values and recover additional tax where an importer has under-declared or undervalued a shipment.
KRA says the increase is partly intended to address under-declaration and undervaluation of imported goods, which it says have caused revenue losses and given non-compliant traders an unfair advantage over those who declare their goods correctly. In other words, KRA’s position is that the previous KSh2.5 million benchmark was no longer adequately reflecting the revenue it should be collecting from consolidated cargo.
Under-declaration is not a new problem. It happens where an importer declares goods at a lower value than they actually cost, understates the quantity being imported, or describes the goods in a way that attracts less tax. The law has always required importers to make accurate customs declarations, and KRA has the power to inspect cargo, question declared values, reassess the goods and recover any tax that should have been paid.
The more difficult issue is whether raising the minimum yield is the right way to deal with that problem.
Raising the benchmark may increase the amount of revenue collected from consolidated cargo, but it does not necessarily establish whether a particular trader has under-declared anything. Under-declaration is ultimately about whether the goods, quantities and values presented to Customs are truthful.
KRA already has significant legal and technological tools to establish that. It can inspect cargo, demand supporting documents, compare declared values, conduct audits and penalise false declarations. It also operates cargo scanners at the Port of Mombasa that can help identify concealed, undeclared or misdescribed goods.
Those scanners cannot, by themselves, establish whether an invoice has understated the value of the goods. That still requires documentary checks, valuation data and targeted inspections. But together, these tools form part of KRA’s existing enforcement machinery.
That is where the real concern arises. If under-declaration is the problem KRA is trying to solve, then the question is whether enforcement should primarily target the traders who actually under-declare, rather than increasing the minimum amount expected from all consolidated containers, including those whose goods may have been properly declared.
KRA says the review was undertaken in consultation with industry stakeholders and that a one-month grace period was given after stakeholders requested more time to prepare. But the public reporting does not clearly show which trader groups were consulted, how broad that consultation was, or whether the concerns now being raised by protesting traders were addressed before the new benchmark took effect.
That matters because consultation is not simply about saying stakeholders were spoken to. The real issue is whether the people most affected by the decision were given a meaningful opportunity to raise their concerns, and whether those concerns were considered before the new benchmark was implemented.
The commercial concern is also real. The simplified system exists because consolidated cargo contains many small consignments belonging to different traders. If the minimum benchmark is raised significantly, traders may end up choosing between meeting a higher revenue threshold or going through a slower, more complicated and potentially more expensive clearance process.
That is why describing the KSh3.2 million figure as merely a benchmark does not end the debate. An administrative measure can still have a direct financial effect on the people required to comply with it.
KRA’s concern about tax leakage is legitimate. Traders who declare their goods honestly should not have to compete with importers who evade duty by understating the value or nature of their goods. But enforcement should also be able to distinguish between a trader who is cheating the system and one whose properly declared goods simply attract a lower amount of tax.
That is where the real legal and policy issue lies. KRA clearly has the authority to enforce customs law and deal with under-declaration. The concern is whether increasing the minimum yield by 28% is a fair and proportionate way of doing so, or whether it risks making compliant small traders carry the cost of abuses committed by others.
That is what sits at the heart of these protests.
The broader point is that tax enforcement must do more than raise revenue. It must also be targeted, transparent and proportionate. If KRA’s concern is under-declaration, then the strongest response is one that identifies and penalises those who actually under-declare, while protecting compliant traders from unnecessary additional costs. Otherwise, a measure intended to stop abuse risks being experienced as a penalty by everyone.
That is why this dispute is about more than KSh700,000. It is about how far KRA should go in using administrative measures to enforce tax compliance, and whether those measures fairly distinguish between those abusing the system and those simply trying to do business within the law.
Kenya Revenue Authority Citizen TV Kenya NTV Kenya The Star, Kenya Standard Digital Dennis itumbi State House Kenya William Samoei Ruto