The Kenya Revenue Authority (KRA) has responded to concerns raised by small-scale traders over the taxation of consolidated cargo, explaining how customs duties are assessed and defending the revised minimum yield applied to certain containers.
In a public statement dated August 27, 2026, KRA said it recognises the importance of cargo consolidation to small-scale traders, particularly those who pool shipments to access more affordable logistics and simplify the process of clearing imported goods.
The tax authority said its customs procedures are designed to facilitate legitimate trade while protecting government revenue and promoting a fair business environment.
KRA said the valuation of imported goods for customs purposes is governed by law under Section 122 and the Fourth Schedule of the East African Community Customs Management Act.
According to the authority, customs duty is assessed based on the transaction value of the goods, in line with the World Trade Organization Customs Valuation Agreement adopted by Kenya.
Where an import declaration is supported by proper commercial documentation, Customs assesses the goods based on the declared transaction value, subject to applicable legal and risk-management requirements.
The authority said the arrangement is intended to ensure traders who provide the necessary documentation are assessed according to the value and classification of their goods.
KRA said small-scale traders often consolidate their goods to simplify shipping clearance formalities and payment of the required customs taxes.
To facilitate this process, Customs introduced a minimum yield test for containers carrying commonly imported general goods. The arrangement provides a simplified alternative to requiring every small-scale trader to present individual transaction documents.
KRA explained that the minimum yield serves as a reference point for identifying containers that meet the threshold for clearance with minimal Customs intervention, based on established risk parameters.
The authority said the minimum yield had not been revised since the 2022/23 financial year.
However, changes in the operating environment, including exchange rates, freight charges and national and East African Community tax laws, prompted a review.
Following consultations with industry stakeholders, KRA said it granted traders a one-month grace period after they requested additional time to prepare for implementation.
The revised minimum yield of Sh3.2 million took effect on August 21, 2026.
The authority has sought to clarify an issue that has caused concern among small-scale traders, stressing that the minimum yield should not be interpreted as the actual tax liability for goods contained in a particular container.
“The minimum yield is not a representation of the actual tax liability for the goods contained in a container,” KRA said.
Instead, the authority described the figure as a risk-management reference used under the simplified clearance arrangement.
According to KRA, the actual tax payable depends on the nature, value and classification of the goods and is determined in accordance with the applicable customs valuation and tax provisions.
This means traders whose goods fall under the simplified arrangement are not automatically required to pay tax based solely on the Sh3.2 million minimum yield.
KRA also said traders have options if they do not want their goods handled under the simplified trade facilitation arrangement.
A trader can request Customs to verify the container and determine the applicable taxes based on the actual contents, correct Customs value and proper classification.
Alternatively, traders can have cargo de-consolidated into individual consignee parcels or consignments. This would allow the respective importers to make individual declarations and pay the requisite taxes directly to KRA based on their goods.
The authority said these options are intended to provide flexibility while ensuring that customs duties are assessed according to the applicable legal requirements.
The tax authority said it remains committed to supporting small-scale traders and legitimate businesses while taking measures to prevent abuse of customs procedures.
KRA said it will continue improving customs processes in a manner that balances trade facilitation with the need to protect government revenue.
The authority’s response comes amid concerns from small-scale traders over the cost implications of the revised customs arrangements and how the new minimum yield could affect their businesses.
KRA, however, maintained that the revised system is intended to make customs clearance more predictable while ensuring that traders meet their tax obligations.
The authority said the simplified arrangement is particularly useful for small-scale traders who consolidate shipments because it reduces the administrative burden associated with individually assessing numerous small consignments
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