Relief for small scale traders after Ruto intervention on tax
Business traders demonstrate at Archives in Nairobi’s Central Business District (CBD) against new tax measures affecting small businesses on August 28, 2026.
Relief is in sight for small-scale traders after President William Ruto revised downwards the applicable benchmark for general consolidated cargo from Sh3.2 million to Sh2 million, a cutback that followed protests by traders who had vowed to take to the streets every Friday until the threshold was reviewed.
President Ruto’s intervention follows recent disagreements between traders and the Kenya Revenue Authority (KRA) over the applicable benchmark for consolidated cargo, which had raised concerns among traders about the rising cost of doing business and its impact on thousands of small and medium-sized enterprises.
The KRA had implemented the revised customs minimum benchmark for general containerised consolidation cargo, with the benchmark adjusted from Sh2.5 million to Sh3.2 million, effective 20 August 2026.
For the traders, the revised threshold would result in an increase in their tax burden and could ultimately push up the prices of imported consumer goods. However, a meeting with the Head of State saw the government scale down on its contentious ambitions.
“Accordingly, KRA will reduce the applicable benchmark for general consolidated cargo from Sh2.5 million to Sh2 million. The existing rates for ready-made garments, footwear and fabrics will remain unchanged, while the newly negotiated rates for air cargo will remain in effect,” a communiqué from the Ministry of Trade reads.
“The advance cargo declaration requirement will be removed to streamline cargo clearance and facilitate legitimate trade.”
Consolidated cargo enables several small-scale importers to pool their goods in a single container, allowing them to share shipping and logistics costs instead of importing individual containers.
According to the traders, the new minimum-yield requirement posed a challenge when the combined customs value of goods in a container falls below the set threshold.
KRA had, at the time, explained that traders could de-consolidate and make individual declarations based on their respective goods.
Under the simplified clearance arrangement, traders in such cases were either required to meet the minimum yield or leave the scheme and have their cargo subjected to individual verification, with taxes then assessed based on the actual contents and value of the goods.
The tax collector explained that the review was undertaken in consultation with industry stakeholders. But the traders, who took to the streets last week on Friday to register their displeasure, were not buying any of that.
Following the meeting with President Ruto to solve the impasse, it was agreed that the KRA will develop and publish an exclusion list of goods that will not qualify for clearance under the general consolidated cargo framework.
The exclusion list, the communique dated September 2 explained, will be informed by the value and nature of the goods, applicable specific tax rates, excisable goods and other relevant customs and revenue considerations.
“This will provide traders and consolidators with certainty on which goods qualify for consolidation and ensure that the new framework is applied consistently and transparently,” it reads.
“All cargo consolidators will be vetted and registered afresh by KRA and will be required to submit a comprehensive list of the individual traders and importers whose goods they consolidate. The deadline for the completion of registration and vetting, and submission of the required trader disclosures, shall be October 15, 2026.”
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