President William Ruto has directed the Kenya Revenue Authority (KRA) to roll back the minimum customs valuation benchmark for consolidated cargo, reversing an increase that triggered a traders’ boycott and a tear-gas response from police in Nairobi’s CBD five days ago.
Hosting Micro, Small and Medium Enterprise (MSME) traders at State House on Wednesday, Ruto ordered the benchmark cut from Sh3.2 million back to Sh2.5 million; the level that had held since the 2022/23 financial year before KRA raised it on August 21. The move meets the central demand of traders from Gikomba, Kamukunji and Nyamakima, who shut their shops and marched on KRA headquarters on August 28 over the 28 percent hike.
A carve-out for high-value goods
The relief comes with a condition. Ruto ordered KRA to compile a list of high-value items that will no longer qualify for consolidation and will instead be valued independently.
“Mr Commissioner General, create a list of the high-value goods and share it with these traders,” he directed, arguing containers holding goods worth millions should not attract the same low charges as genuinely low-value shipments. The carve-out narrows how many shipments actually benefit from the restored Sh2.5 million cap.
Freight and infrastructure relief
Ruto also ordered Kenya Railways to cut freight charges for cargo destined for deconsolidation to Sh10,000, and to rehabilitate land near the Boma Line clearance facility beside Nairobi’s Central Railway Station, which he said “should stop looking dilapidated.”
How we got here
The Sh3.2 million figure took effect after a one-month grace period, replacing a benchmark KRA had held for six years. The authority called it a risk-management reference rather than a flat tax, citing under-declaration and concealment of high-value goods. That did little to calm traders: when they took to the CBD on August 28, police responded with tear gas, a response former LSK president Faith Odhiambo said undermined the constitutional right to peaceful assembly. KRA Board Chair Ndiritu Muriithi had urged traders to deconsolidate containers and pay duty on actual imports instead.
What it means for markets
The reversal is direct cost relief for import-dependent small traders and reduces the risk of further stock disruption at markets already hit by the boycott. But the high-value goods exclusion means relief isn’t universal — its scope, still to be defined, will determine how much of the import base stays outside the cheaper benchmark.
For KRA, the rollback trims near-term revenue expectations, a gap the authority will look to offset through the reclassification and continued enforcement. Cheaper rail freight and a rehabilitated Boma Line also point toward pushing more traders toward deconsolidation over time.
Markets will now watch for the formal notice implementing the Sh2.5 million cap and the published high-value goods list.
