Why traders are protesting new Sh3.2m KRA container tax
Traders hold placards during a protest against new tax measures affecting small businesses in Nairobi.
Small-scale traders are planning weekly Friday protests after the Kenya Revenue Authority raised the benchmark tax on consolidated imports by 28 per cent, warning the increase will squeeze thin margins and raise prices.
The traders, under the Micro, Small and Medium Enterprises (MSME) Alliance of Kenya, want KRA to suspend the new rates and hold consultations with businesses. KRA raised the benchmark for a 40-foot container from Sh2.5 million to Sh3.2 million on August 20, saying the figure is a minimum reference point for simplified clearance rather than a flat valuation for every consignment.
The authority says traders can seek verification where the benchmark exceeds the actual value of their goods. Containers containing goods worth more than the benchmark will be subjected to the applicable customs valuation and tariff treatment.
But traders say the Sh700,000 increase will make imports more expensive in a difficult business environment where many cannot pass additional costs to consumers.
“We write to categorically reject the unilateral tax directive,” the lobby said in a petition presented to KRA on Friday, describing the increases as a threat to micro-importers, wholesale markets and retail traders.
Business traders demonstrate at Archives in Nairobi’s Central Business District (CBD) against new tax measures affecting small businesses on August 28, 2026.
Cargo consolidation allows traders to combine shipments in one container, reducing the cost of importing goods they cannot afford to ship individually.
The arrangement is used by traders dealing in mobile phones, laptops, toys, shoes, ready-made clothes, carpets and second-hand clothes in Nairobi.
The alliance said the new benchmarks have pushed the reference rate for shoes from Sh2.8 million to Sh4 million, ready-made clothes from Sh4 million to Sh6 million, and carpets from Sh3.2 million to Sh4 million.
It warned that the increases could shut out traders in Nyamakima, Kamukunji, Gikomba, Eastleigh and downtown Nairobi, where businesses depend heavily on consolidated imports.
KRA said it had consulted representatives of small traders, cargo consolidators and other players before implementing the new rates.
The taxman accused some traders of using consolidation to under-declare imports, conceal high-value goods and evade taxes.
“The simplified benchmark helps facilitate clearance and reduces the administrative burden associated with individually assessing numerous small consignments whilst ensuring the requisite taxes are collected,” KRA said.
Chairman of the Kamukunji Business Traders Association, Peter Kariuki, holding a microphone, addresses traders during demonstrations against new tax measures affecting businesses at Archives in Nairobi’s Central Business District (CBD) on August 28, 2026.
The traders dispute the claim that there was consensus, saying their representatives opposed the proposed figures during consultations. Friday's protests brought parts of downtown Nairobi to a standstill, with traders engaging police in running battles and businesses closing amid fears of looting.
The alliance wants the new benchmarks suspended and an open forum convened with MSME groups from affected trading areas.
A Kamukunji trader who joined the protest said the increase could wipe out profits.
“If they add the Sh700,000, there is no profit we will make,” the trader said, urging the government to intervene.
KRA has intensified efforts against tax evasion as the government seeks to avoid major duty increases amid protests in an election year.
The previous Sh2.5 million benchmark for a 40-foot container had remained unchanged for six years. Before the simplified benchmark, traders paid Sh200 per kilogramme of consolidated cargo.
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