What happened

The Kenya Revenue Authority (KRA) announced that customs duties collected in September totalled Sh90 billion, a figure that comfortably exceeds the Treasury’s revenue target for the month. The surge is attributed to a noticeable rise in the volume and value of imports entering the country, especially through the main seaports of Mombasa and Lamu. Officials said the amount reflects both higher tariff collections on goods such as machinery, construction materials and consumer electronics, and an increase in the number of clearance transactions processed by the authority’s electronic system. This development marks a significant fiscal inflow at a time when the government is seeking to close the budget gap caused by lingering pandemic‑related deficits.

Context and background

KRA, the agency responsible for tax administration in Kenya, has been modernising its customs operations over the past five years. The introduction of the Integrated Customs Management System (ICMS) and the rollout of electronic single‑window clearance have reduced processing times and improved compliance monitoring. In recent budget speeches, the Treasury highlighted the need for stronger customs performance to diversify revenue sources beyond income tax, which has been volatile due to fluctuations in the informal sector. The September collection therefore aligns with policy directives that emphasise trade‑related levies as a stable revenue pillar.

Rising imports have been driven by several macro‑economic factors. The depreciation of the Kenyan shilling against the US dollar made imported raw materials more expensive, prompting manufacturers to source larger quantities earlier in the fiscal year. Additionally, the reopening of global supply chains after COVID‑19 disruptions led to a backlog of shipments that arrived in Kenyan ports during the month. Trade data released by the Kenya National Bureau of Statistics (KNBS) shows a month‑on‑month increase of roughly 12 percent in the value of goods cleared in September compared with August, although the exact figure was not disclosed in the KRA statement.

The Treasury’s target for customs revenue in September was set during the 2024/25 fiscal planning exercise, aiming for Sh80 billion based on projected import growth and historical collection patterns. By exceeding this benchmark by Sh10 billion, KRA not only met the government’s immediate cash‑flow needs but also demonstrated the effectiveness of recent anti‑evasion campaigns. Those campaigns, launched in early 2023, focused on high‑risk commodities such as luxury vehicles and petroleum products, resulting in higher compliance rates and a reduction in under‑declared shipments.

Compared with what is normal

Customs revenue in September has traditionally lagged behind the peak months of July and August, when agricultural exports and seasonal imports are at their highest. Historical Treasury reports indicate that September collections usually range between Sh65 billion and Sh75 billion, depending on global commodity prices and exchange‑rate movements. The Sh90 billion figure therefore represents a substantial uplift, roughly 20‑30 percent above the typical range.

• Previous September collections (average 2022‑2023): about Sh70 billion.
• Target set by Treasury for September 2024: Sh80 billion.
• Actual collection achieved: Sh90 billion, a 12.5 percent surplus over the target.
• Key drivers: higher import volumes, stricter compliance enforcement, and improved electronic clearance efficiency.

Why it matters

For Kenyan SMEs that rely on imported inputs, the higher customs revenue signals that the government is successfully capturing duties on the goods entering the market. While this means a larger fiscal contribution, it also raises the cost of imported raw materials, which can affect pricing strategies for manufacturers and retailers. Companies that have not fully optimised their customs classification may face higher duty liabilities, underscoring the importance of accurate tariff coding and timely documentation.

From a macro‑economic perspective, the surplus helps the national treasury fund critical expenditures such as infrastructure projects, health services and debt servicing. In the current fiscal year, the government has projected a budget deficit of roughly Sh500 billion; the additional Sh10 billion from customs reduces the financing gap and eases pressure on borrowing. Moreover, the strong performance may influence future fiscal policy, potentially allowing the Treasury to maintain or modestly increase spending without resorting to higher tax rates elsewhere.

Practical steps

• Review your import documentation: ensure that product descriptions, HS codes and valuation statements are accurate to avoid unexpected duty assessments.
• Engage a customs broker or trade compliance specialist: professional advice can help you take advantage of any available duty concessions or exemptions.
• Monitor exchange‑rate movements: fluctuations can affect landed costs, so consider hedging strategies if you import high‑value items.
• Update your accounting systems: record customs duties as part of the cost of goods sold to reflect true profitability.

Beavoren Ventures offers a Tax Planning & Compliance service that assists businesses in navigating customs duties, optimizing tariff classifications and ensuring timely filing of import taxes.

Book a consultation with Beavoren Ventures today and let us handle your compliance, books, and advisory in one place.

Disclaimer: This article is informational and does not constitute formal tax, audit or legal advice. For guidance specific to your circumstances, please contact Beavoren Ventures.