Traders in Nairobi’s Central Business District began closing some shops on Friday morning as they prepared to protest changes to customs valuation by the Kenya Revenue Authority (KRA), with uncertainty hanging over whether the planned demonstrations would spread across the city.
The closures were seen in several parts of the CBD as traders voiced concerns about the cost of importing goods and the effect of KRA’s revised Customs Minimum Benchmark on their businesses.
The new benchmark for consolidated cargo has been raised from Sh2.5 million to Sh3.2 million, prompting some small-scale traders to question how the change will affect the cost of clearing their goods and their already narrow profit margins.
While some businesses in the CBD remained closed, trading continued normally in other parts of Nairobi. Eastleigh was largely calm by mid-morning, with shops open and business going on as usual.
Security personnel were meanwhile deployed outside Times Tower, which hosts KRA offices, ahead of the expected protests.
A video seen by Radio Generation showed several officers outside the building, some of them carrying batons, as preparations for the planned demonstrations continued.
The protests followed growing concern among traders over the increase in the customs benchmark, although KRA moved to explain how the new arrangement works.
In its clarification, the revenue authority said the Sh3.2 million figure should not be viewed as the amount of tax that must be paid for every container.
“It is important to emphasise that the minimum yield is not a representation of the actual tax liability for the goods contained in a container,” the authority said.
KRA said the actual amount payable depends on the nature and value of the goods, as well as their classification for customs purposes.
The authority further said the minimum yield test was designed to give small-scale traders using consolidated cargo a faster and more predictable way of clearing their imports.
KRA said the previous benchmark had remained in place since the 2022/23 financial year before the latest review.
It linked the adjustment to changes in the business environment, citing fluctuations in exchange rates, freight charges and developments in national and East African Community tax laws.
Even with the clarification, some traders maintained their plans to demonstrate, with businesses in parts of the CBD shutting their doors before the expected protests.
KRA has said traders who are not comfortable with the simplified clearance arrangement can choose to have their goods assessed individually.
“A trader may opt out of the simplified trade facilitation arrangement and request Customs to verify their container and determine the applicable taxes based on the actual contents, their correct customs value and proper classification,” KRA stated.
Importers also have the option of separating their goods from consolidated cargo and declaring each consignment individually.
Under the arrangement, traders would make separate declarations and settle the taxes applicable to their specific goods directly with KRA.
The authority said the different options were meant to make it easier for traders to clear their goods while ensuring the government continues to collect the revenue due.
By mid-morning, the scale of the planned demonstrations was yet to become clear, with some businesses remaining closed in the CBD while other commercial centres continued operating normally.
The expected protests are centred on taxation and customs valuation, but traders are also raising wider concerns about the growing cost of running their businesses.