What happened

The Kenya Revenue Authority (KRA) recently issued a formal licence notice to every registered importer and to operators of bonded and private warehouses across the country. The notice requires these businesses to obtain a specific operating licence from KRA before they can continue clearing goods or storing them for customs purposes. Failure to secure the licence within the stipulated period will result in the suspension of clearance privileges and possible penalties. The directive was circulated through KRA’s official channels and posted on the Kenyans.co.ke portal for public reference.

Context and background

KRA has long been responsible for collecting customs duties, excise taxes and other revenue streams that fund Kenya’s development agenda. Over the past few years, the authority has intensified its focus on formalising the import chain, aiming to curb under‑declaration of value and to improve traceability of goods entering the country. The licence notice is part of a broader compliance drive that includes the introduction of the Integrated Customs Management System (ICMS) and the recent rollout of electronic single window procedures.

Importers and warehouse operators have traditionally relied on a combination of customs brokers and informal arrangements to move cargo through ports such as Mombasa, Lamu and Kisumu. While licences have existed for certain high‑risk commodities, a universal licence requirement for all importers marks a departure from earlier practice. The move follows a series of parliamentary hearings where lawmakers urged KRA to tighten loopholes that allow some traders to evade duty payments.

Warehouse operators, especially those managing bonded warehouses, play a critical role in the supply chain by holding goods under customs control until duties are paid. The new licence aims to ensure that these facilities meet minimum security, record‑keeping and reporting standards set by KRA. The authority has indicated that it will conduct field inspections to verify compliance, and that licences will be issued on a first‑come, first‑served basis, subject to verification of the operator’s registration documents.

Compared with what is normal

Historically, KRA’s licensing regime focused on specific sectors such as petroleum, tobacco and pharmaceuticals, where health and revenue concerns are acute. General importers and most private warehouses have operated without a dedicated KRA licence, relying instead on customs broker authorisations. The new notice expands the licensing net to cover all import activities, regardless of commodity type.

  • Previously, only about 30 % of importers held a KRA‑specific licence; the new rule expects near‑100 % coverage.
  • Warehouse licences were optional for most private facilities; now they are mandatory for any warehouse handling customs‑bonded cargo.
  • Compliance timelines have been shortened from the usual 12‑month grace period to a 90‑day window for new licences.
Why it matters

For Kenyan SMEs that rely on imported raw materials, the licence requirement introduces an additional administrative step that could affect cash flow and lead times. The cost of obtaining the licence, while not yet disclosed, is expected to be modest but may be significant for very small traders. More importantly, the risk of clearance delays or penalties for non‑compliance could erode profit margins, especially for businesses operating on thin margins.

Warehouse operators will need to invest in upgraded record‑keeping systems and possibly enhance physical security to meet KRA’s standards. Failure to do so could result in the loss of bonded status, meaning that goods would be subject to immediate duty assessment, increasing inventory holding costs. The broader impact is a push towards greater transparency in the supply chain, which could ultimately level the playing field for compliant businesses.

Practical steps
  • Review the licence notice carefully and note the deadline for application; mark it on your business calendar.
  • Gather all required documentation, including your KRA PIN, company registration certificates, and proof of warehouse security measures.
  • Contact KRA’s Customer Care or visit the nearest KRA office to clarify any ambiguities about the application process.
  • Update your accounting and inventory systems to capture licence numbers and related compliance data.
  • Consider seeking professional advice to ensure that your licence application aligns with the latest regulatory guidelines.

Beavoren Ventures offers a specialised Tax Planning & Compliance service that can help importers and warehouse operators navigate the new licence requirements, prepare the necessary documentation and integrate compliance checks into their daily operations.

Talk to our team at Beavoren Ventures - info@beavorenventures.co.ke - to set up your systems correctly.

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.