Ruto consolidated cargo fee directive throws KRA into a spin
A directive by President William Ruto for the minimum customs charge for containerised consolidated cargo to be lowered back to the old cap of Sh2 million has triggered a fresh challenge for the Kenya Revenue Authority (KRA), which is already under pressure to improve collections and streamline customs administration.
The President on Wednesday ordered the reduction of the customs benchmark from Sh3.2 million to Sh2 million, pushing it even lower than the Sh2.5 million that had been in place over the last six years before the KRA reviewed it upwards, sparking protests by small traders.
Insiders said that the directive is expected to pile pressure on KRA because customs collections are a key driver of domestic revenue performance.
“The directive caught us off-guard, and there will be a lot of reviews to correct the mess from the development. The new rates had already been factored into collection projections, and placing the rates back to levels of more than six years ago will certainly cause setbacks,” an insider at KRA told Business Daily.
“Customs is a key mover for our overall numbers, and any variations on such rates reflect on the bigger picture,” the source added.
Data shows that in 2025/26, customs generated Sh988.8 billion, marking a 12.4 percent growth compared to the previous year and exceeding its target by Sh7.99 billion. In 2024/25, the tax head collected Sh879.33 billion, an equivalent of 11.1 percent growth compared to the previous year and exceeding its target by Sh48.96 billion.
KRA has attributed the strong performance of customs to a shift where it opted to charge consolidated cargo per transaction effective March 1, 2023, rather than Sh200 per kilogramme, which had previously been in place.
Sources revealed to Business Daily that the KRA Customs team were on Thursday locked in meetings to review the impact of the Presidential directive amid pressure by traders to implement the lower Sh2million benchmark.
The President’s directive came barely days after KRA defended the Sh3.2 million customs benchmark valuation, saying it factored in emerging issues in the cost of freight, foreign exchange, insurance and the regional taxation landscape.
“We have had this benchmark revised over the years, and the number is arrived at based on analysis, trends, and looking at the different categories of items that are commonly imported by consolidators. The last time that we reviewed these numbers was in 2023, with Sh2.5 million being the number assigned to a 40-foot container,” KRA’s Customs Commissioner, Lillian Nyawanda, said on August 27, 2026, ahead of protests by traders.
“This number could vary depending on the content of the container. Between 2023 and 2026, so much has happened in the tax landscape, including changes in the exchange rate, freight cost, insurance cost, and at the regional level we have had stays of application. The Sh3.2 million is a number arrived at based on this analysis.”
The KRA’s customs decisions are guided by the Fourth Schedule of the East African Community Customs Management Act, which provides methods used for cargo valuation.
These methods include the Transaction Value approach where the customs value assigned is pegged on the price actually paid for the goods imported; the Deductible Value approach where the customs value assigned is pegged on identical or similar goods imported into a partner state and the Computed Value approach where the customs value assigned to imports is pegged on the cost of materials, fabrication and processing used in the production of the imported goods.
Crédito: Link de origem