The government has bowed to pressure from small-scale importers, with President William Ruto proposing to cut the customs benchmark for general consolidated cargo to Sh2 million.
Ruto, who met small traders and other stakeholders at State House, Nairobi, on Wednesday, said the move will ease the rising cost of doing business.
The concession follows a week of protests after the Kenya Revenue Authority (KRA) raised the benchmark for a consolidated 40-foot container from Sh2.5 million to Sh3.2 million.
The increase, which took effect in August, triggered protests among small traders who rely on consolidated shipments to import relatively small quantities of goods.
Tensions escalated on August 28 when police used tear gas to disperse traders demonstrating in Nairobi, forcing several businesses in the city centre to close.
The revenue agency had defended the higher benchmark as part of efforts to curb under-declaration and undervaluation of imports, arguing that the practices undermine compliant businesses and local manufacturers.
The taxman maintained that the benchmark was a reference point for customs valuation and not a fixed price at which every consignment would be assessed.
Under the agreement reached at the meeting, KRA will reduce the benchmark for general consolidated cargo from Sh2.5 million to Sh2 million.
Ruto also directed that ordinary goods be treated separately from high-value merchandise, rather than placing an entire container in a higher valuation category.
The concession will not apply to all goods. Existing rates for ready-made garments, footwear and fabrics will remain unchanged, while newly negotiated rates for air cargo will continue to apply.
The government will also remove the Advance Cargo Declaration requirement and have KRA publish an exclusion list specifying goods that will not qualify for the general consolidated cargo arrangement.
The list will consider the value and nature of goods, specific tax rates, excisable products and other customs requirements.
At the same time, KRA will conduct fresh registration and vetting of cargo consolidators.
They will be required to disclose comprehensive details of individual traders and importers whose goods they handle, with the process expected to be completed by October 15, 2026.
The disclosures are expected to give the taxman greater visibility over small importers whose consignments are bundled into consolidated containers while strengthening accountability among consolidators.
The government will also facilitate the establishment of designated deconsolidation centres in Nairobi and Mombasa to streamline cargo separation and reduce handling and clearance costs.
Kenya Railways has, with immediate effect, cut the charge for moving cargo from the Inland Container Depot to the Bomaline De-consolidation Centre from Sh58,000 to Sh10,000, giving traders a Sh48,000 cost reduction.
The agreement also commits the government to improving the wider business environment, including protecting legitimate businesses from unnecessary harassment.
A multi-stakeholder committee chaired by the Cabinet Secretary for Investments, Trade and Industry will oversee implementation and report quarterly to the President.
The deal highlights the delicate balance facing the government as it seeks to strengthen customs compliance and revenue collection without driving thousands of small businesses out of formal trade.
