President William Ruto has told the Kenya Revenue Authority (KRA) to reverse a recent hike in customs charges on consolidated cargo, bringing relief to small traders who import goods collectively.
The directive came on Wednesday, September 2, during a meeting with small business owners at State House, Nairobi. KRA had raised the benchmark used to assess consolidated containers from KES 2.5 million to KES 3.2 million, a change that took effect in August.
Ruto ordered it brought back down to KES 2.5 million.
What Consolidation Means for Small Traders
Consolidation allows several importers to share one shipping container instead of each paying to ship their own. It’s common among small traders who bring in goods worth KES 50,000, KES 100,000, or KES 200,000, amounts too small to justify importing an entire container alone.
Once the container arrives, the goods are separated and released to each trader individually.
William Ruto defended the practice, comparing it to how small-scale tea farmers pool their harvests before export. A farmer with half an acre of tea can’t ship to Europe on their own, but combined with output from many other small farmers, the volume becomes exportable.
He said cargo consolidation works on the same principle, just in reverse: instead of many farmers combining crops to sell abroad, many traders combine imports to bring goods in.
Why the Benchmark Became a Problem
KRA uses the benchmark as a minimum value assumption for tax purposes, not a fixed charge applied to every container regardless of contents. The KES 2.5 million figure was based on the assumption that a typical consolidated container held goods worth around KES 6 million.
Ruto pointed out the flaw in treating every container the same way. A trader whose share of a container is worth KES 20 million would pay the same benchmark charge as one whose goods are worth KES 6 million, which he said was unfair.
Raising the benchmark to KES 3.2 million made the problem worse for traders bringing in smaller, lower-value consignments, since they’d be taxed as if their goods were worth far more than they actually were.
The Fix: Separating High-Value Goods
Rather than scrapping the benchmark system altogether, Ruto proposed splitting containers into two categories. Ordinary consolidated cargo would go back to being assessed under the KES 2.5 million benchmark.
High-value goods, however, would be pulled out and assessed separately, based on their actual worth.
To make this work, Ruto instructed KRA’s Commissioner General to draw up a specific list of goods that no longer qualify for consolidation treatment.
He was clear that the list needs to be public and known to consolidators in advance, either through official gazettement or another formal communication, so traders aren’t caught off guard during customs clearance.
“I want us to agree here. The people from KRA should give us high-value items which do not qualify for consolidation. It is one, two, three, four, five. Let it be known to these consolidators,” Ruto said.
A Push for Registered Consolidators
Ruto also raised concerns about who is allowed to operate as a consolidator in the first place.
He questioned whether anyone can simply declare themselves one without meeting any formal requirements, and called for a system to clearly identify and register legitimate consolidators so traders know who they’re dealing with.
Cheaper Rail Transport Too
Beyond the tax benchmark, Ruto announced a major cut to container transport costs on Kenya Railways. The charge for moving a 20-foot container, previously capped at KES 75,000, will drop to KES 10,000.
“I am also directing Kenya Railways, the container charges on traders, which is usually capped at KES 75,000, I am reducing it to KES 10,000,” Ruto said.
Ruto acknowledged that traders had pushed for the benchmark to go even lower, to KES 2 million, but said the government still needs revenue to pay teachers, security officers, and other public servants.
His stated goal is to protect small traders from an overly blunt tax system while making sure high-value importers pay their fair share and the state doesn’t lose out on revenue it depends on.
