What happened

On the announcement made by the Trade Cabinet Secretary, a dedicated committee has been set up to implement the Kenya Revenue Authority’s (KRA) new cargo benchmark of Ksh2 million. The move was reported in People Daily and signals a shift in how customs values will be assessed for goods entering Kenya. The committee’s mandate is to translate the benchmark into operational guidelines for customs officers, importers and freight forwarders. The decision follows a series of consultations within the Ministry of Trade and KRA that aimed to close gaps in cargo valuation. The rollout is expected to begin later this year, with a phased approach to allow businesses time to adapt.

Context and background

The Trade Cabinet Secretary, who oversees Kenya’s import‑export policy, has been vocal about strengthening revenue collection while protecting legitimate trade. In recent years, KRA has faced criticism that low cargo valuations enable under‑declaration of goods, reducing duty receipts and creating an uneven playing field for compliant traders. The new Sh2 million benchmark is therefore part of a broader effort to align customs valuation with international best practices, such as the World Customs Organization’s guidelines. The committee will include senior officials from KRA, the Ministry of Trade, the Kenya Association of Manufacturers and representatives from the freight forwarding industry, ensuring a multi‑stakeholder perspective.

Historically, Kenya’s customs valuation system has relied on a combination of invoice values, transaction values and, where necessary, deductive methods. However, the lack of a clear minimum benchmark meant that some importers could declare values well below market rates without triggering additional scrutiny. The People Daily report indicates that the new benchmark is intended to set a floor below which cargo will automatically be subject to verification, thereby reducing the scope for undervaluation. The committee’s first task is to draft standard operating procedures, train customs officers and communicate the changes to the private sector through workshops and online portals.

Implementation will also intersect with other regulatory reforms, such as the recent digitisation of the Single Window System and the introduction of the Electronic Single Window (eSW) platform. By linking the benchmark to the electronic submission of cargo manifests, KRA hopes to achieve real‑time monitoring and quicker resolution of valuation disputes. The trade community has been invited to submit feedback during a 60‑day public comment period, after which the committee will finalise the guidelines and seek cabinet approval.

Compared with what is normal

Kenya’s customs valuation practices have traditionally allowed flexibility for low‑value shipments, especially in the informal sector. The Sh2 million threshold represents a significant upward shift from the informal norms that have existed for years. Below are key differences between the new benchmark and prior practice:

• Previously, cargo valued below Ksh1 million often escaped detailed scrutiny; under the new rule, any shipment exceeding Ksh2 million will trigger mandatory verification.
• The benchmark applies to the total cargo value per consignment, not per item, meaning larger mixed shipments will be assessed as a whole.
• Customs officers will now have a clear quantitative trigger, reducing reliance on subjective risk assessments.
• Importers who previously used split shipments to stay under lower thresholds will need to consolidate documentation to demonstrate compliance.
• The phased rollout includes an initial pilot at Nairobi’s Jomo Kenyatta International Airport, expanding later to Mombasa and other entry points.

Why it matters

For Kenyan SMEs that rely on imported raw materials, the Sh2 million benchmark could affect cash flow and pricing strategies. A higher declared value means higher duty and tax liabilities, which may increase the landed cost of goods. Companies that have previously benefited from low‑value declarations will need to reassess their import budgets and possibly renegotiate supplier terms. On the macro level, the benchmark is expected to boost revenue collection for the treasury, narrowing the fiscal gap and providing additional resources for infrastructure projects. Moreover, a more transparent valuation system can improve Kenya’s standing in global trade indices, potentially attracting foreign investors who value predictable customs procedures.

Practical steps

• Review recent import invoices and assess whether any upcoming shipments will exceed the Ksh2 million threshold; adjust procurement plans accordingly.
• Engage with your freight forwarder to ensure they are aware of the new verification requirements and can provide accurate cargo declarations.
• Participate in the public comment period announced by the committee; submitting feedback can help shape the final guidelines to suit your business needs.
• Update internal accounting and tax compliance systems to capture the higher duty calculations, and train finance staff on the new procedures.
• Consider consulting a tax adviser to model the impact on your cost structure and explore possible duty reliefs or exemptions that may still apply.

Beavoren Ventures’ Tax Planning & Compliance service can help you navigate the new cargo benchmark, ensuring your declarations are accurate and your tax position is optimised.

Need help with compliance? Email info@beavorenventures.co.ke or call +254 716 296 857.

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.