New Customs Benchmark Shields Compliant Traders, Closes Valuation Gaps

Kenya Revenue Authority (KRA) has implemented the revised Customs Minimum Benchmark for general containerised consolidation cargo, with the benchmark adjusted from KSh2.5 million to KSh3.2 million, effective 20 August 2026.

The implementation marks the conclusion of a transitional period following extensive consultations between KRA, the Kenya International Freight and Warehousing Association (KIFWA), representatives of small traders, cargo consolidators and other private-sector stakeholders.

The consultations sought to establish a more predictable and equitable framework for customs valuation while addressing concerns over the misuse of cargo consolidation arrangements.

The revised benchmark is intended to promote fairness in trade, protect government revenue and ensure compliant businesses are not disadvantaged by traders who deliberately evade customs obligations.

“This is not about targeting small traders. It is about creating a level playing field where businesses compete fairly. A trader who declares goods correctly and pays the taxes due should not be disadvantaged by another trader who gains an unfair cost advantage through undervaluation, under-declaration or concealment of goods,”

Cargo consolidation provides an important and legitimate avenue for small traders to import goods by combining shipments in a single container, reducing the cost of international trade.

However, KRA has identified instances where the arrangement has been exploited to facilitate customs non-compliance, including undervaluation, under-declaration, misdescription, misclassification and concealment of high-value goods.These practices create revenue leakage and distort competition by allowing non-compliant businesses to bring goods into the country at artificially low costs.

High-value electronics, including smartphones, are among the products that can be affected by such practices. A high-end phone, for example, may be declared as a lower-value model in an attempt to reduce the customs value and taxes payable.

KRA has also raised concern that some larger importers who nowadays seek to use consolidation arrangements to reduce their tax obligations, creating an unhealthy business environment for compliant traders.

The KSh3.2 million benchmark is a minimum reference point and not a flat valuation applicable to every container. A container may contain high-value electronics, machinery, specialised equipment or other goods whose actual customs value is significantly higher than KSh3.2 million.

Where the actual value of the goods exceeds the benchmark, importers are required to make accurate declarations and the goods will be subjected to the applicable customs valuation and tariff treatment.

“The KSh3.2 million benchmark does not mean that every container is valued at KSh3.2 million. If the actual value of the goods is higher, that value must be declared and the correct taxes paid. The benchmark is intended to strengthen valuation controls, not to provide a ceiling for the value of imported goods,”

The review also addresses the fact that the previous KSh2.5 million benchmark had remained unchanged for approximately six years. The KSh2.5 million benchmark was agreed following engagements between small traders and the Government, with an understanding that it would be reviewed upwards after one year. However, the review did not take place and the benchmark remained unchanged despite changes in economic conditions, import values and the nature of goods entering the country. The adjustment to KSh3.2 million therefore provides a more current and predictable reference point for customs administration.

The revised benchmark is also important in protecting legitimate businesses and local manufacturers. When imported goods are undervalued or inaccurately declared, they can enter the Kenyan market at an artificially low cost. This can give them an unfair advantage over locally manufactured goods whose producers comply with tax and other regulatory requirements. The measure therefore supports a level playing field between imported and locally produced goods.

“Fair competition requires businesses to compete based on efficiency, quality and innovation, rather than through avoidance of taxes. Protecting the integrity of the customs system also protects compliant businesses and supports local manufacturing.”

The measure should not be characterised as a dispute between the Authority and small traders. The Authority recognises the important contribution of small businesses to the economy and acknowledges that many traders and consolidators comply with customs requirements and pay the taxes due. The concern is with non-compliant practices that give some businesses an unfair advantage.

The Authority has also reminded traders that compliance does not end once consolidated cargo has been cleared through customs. Traders who subsequently sell their goods in markets such as Eastleigh, Kamukunji, Nyamakima and Toy Market, among other commercial centres, are required to meet their applicable domestic tax obligations.

This includes appropriate business registration, electronic invoicing requirements where applicable, and accurate declaration of income and taxes due. Traders should embrace compliance across the entire supply chain.

Importing goods and paying customs taxes is only one part of compliance. When the goods enter the domestic market and are sold, the trader must also meet the applicable tax obligations. Every business must contribute its fair share towards national development.

Read Also: Shared Containers, Shared Rules: What Kenya’s New Customs Benchmark Really Means for Small Traders