Traders contest KRA’s revised limit for consolidated cargo

Small traders have strongly contested the Kenya Revenue Authority (KRA) announcement of a new threshold for containerized cargo, asserting that the revised limit, set at Ksh 3.2 million for a 40ft shipping container, is unduly punitive. The traders hold demonstrations in Nairobi, drawing crowds and resulting in the closure of some shops in the Central Business District.

The move comes after KRA Commissioner for Customs and Border Control, Dr Lilian Nyawanda, revealed that the increase was prompted by cases of underdeclaration and undervaluation of cargo, which undermines fair trade practices and revenue collection. Nyawanda clarified that while the Ksh 3.2 million figure serves as a reference point, it is not a fixed amount but can be higher or lower, depending on the actual content, classification, and taxes payable of the goods.

She added that traders are encouraged to deconsolidate their shipments if they believe the new limit does not apply, allowing for more precise tax assessment and the potential claim of input Value Added Tax (VAT). The traders argue that deconsolidation offers benefits such as the ability to submit individual import declarations and invoices, which could facilitate input VAT claims from a domestic tax perspective.

Despite KRA's stated intent to verify cargo and adjust taxes accordingly, traders continue to call for either a return to the previous Ksh 2.5 million benchmark or a renegotiation process with KRA to address their concerns. The cargo consolidation initiative, introduced six years ago, aimed to alleviate the financial burden of shipping and customs taxes on small traders while streamlining clearance processes.