Nairobi — Small traders importing goods through consolidated cargo shipments face higher customs valuation benchmarks after the Kenya Revenue Authority (KRA) raised the minimum reference value for a consolidated 40-foot container by 28 percent to Sh3.2 million.

Kenya Business InsightsThe new benchmark, up from Sh2.5 million, took effect on August 20 and could increase the tax base used to assess consolidated imports.

Cargo consolidation allows several importers to share container space, helping small businesses reduce shipping costs when they do not have enough goods to fill an entire container.

KRA, however, said the increase is aimed at addressing undervaluation and creating fair competition rather than targeting small traders.

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"This is not about targeting small traders. It is about creating a level playing field where businesses compete fairly," the authority said.

"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."

KRA said the revised benchmark followed consultations with the Kenya International Freight and Warehousing Association (KIFWA), small traders, cargo consolidators and other private-sector stakeholders.

Kenya Business InsightsThe authority clarified that Sh3.2 million is not a flat valuation applied to every consolidated container.

Importers whose goods are worth more than the benchmark must declare their actual value and pay the applicable customs duties and taxes.

KRA said the previous Sh2.5 million benchmark had remained unchanged for about six years despite changes in economic conditions, import values and the types of goods entering the country.

The authority cited undervaluation, under-declaration, misclassification, misdescription and concealment of high-value goods among the practices it is seeking to curb.

High-value electronics such as smartphones, KRA said, can be deliberately declared at lower values to reduce customs liabilities.

The authority also raised concerns over larger importers increasingly using consolidation arrangements, saying the practice could be abused to lower tax obligations.