Kenya Revenue Authority’s new Ksh3.2 million customs benchmark for consolidated cargo has sparked concerns among traders over the rising cost of importing goods and the possible impact on consumers.

The benchmark was increased from Ksh2.5 million to Ksh3.2 million, representing a Ksh700,000 rise. KRA, however, has clarified that the figure is not a flat tax charged on every container.

The authority says the Ksh3.2 million figure is used as a risk-management reference for simplified clearance of consolidated cargo. The actual amount of tax payable depends on the type, value and classification of the goods being imported.

Despite the clarification, small-scale traders have raised concerns that higher import-related costs could squeeze their profits and make it harder to run their businesses.

Importers already have to meet other expenses, including freight, transport, storage and clearance charges. An increase in the overall cost of bringing goods into the country could leave traders with fewer options.

Some businesses may choose to absorb the additional costs by accepting smaller profits, while others could reduce the amount of goods they import or increase their selling prices.

If traders pass the extra costs to customers, consumers could eventually pay more for imported products such as clothes, electronics and household goods.

Kiharu MP Ndindi Nyoro has also criticised the new benchmark, arguing that traders are already dealing with increased freight charges.

However, KRA maintains that importers who believe the benchmark does not accurately reflect their goods can have their cargo verified. The authority says officers can determine the actual contents, classification and taxes payable after verification.

The debate has therefore shifted beyond the Ksh3.2 million figure to the wider question of how Kenya can increase tax collection without placing excessive pressure on small businesses.

KRA has a responsibility to prevent tax evasion and ensure the government collects revenue that is legally due. At the same time, traders want a predictable system that allows them to plan their businesses without facing unexpected costs.

The biggest concern is that continued increases in import costs could eventually affect businesses, jobs and household spending.

As the debate continues, the government faces the challenge of balancing revenue collection with the need to keep the cost of doing business manageable for traders and consumers.