Govt cuts consolidated cargo benchmark to Sh2m in deal with traders

President William Ruto during a meeting with traders and stakeholders in the consolidated cargo sector on September 2, 2026. [PCS]

The Government has lowered the benchmark for general consolidated cargo from Sh2.5 million to Sh2 million, in a move aimed at easing the cost of doing business for Kenyan traders and small and medium-sized enterprises.

The decision followed consultations between President William Ruto, traders and stakeholders in the consolidated cargo sector after disagreements with the Kenya Revenue Authority (KRA) over the applicable valuation benchmark for imported goods.

According to a communiqué issued on September 2, the dispute had raised concerns over increasing taxation, clearance and handling costs, threatening to further squeeze thousands of small and medium-sized enterprises.

“Following the consultations, the Government and traders have reached an agreement to resolve the outstanding issues while strengthening compliance, transparency and accountability in the consolidated cargo sector,” the communiqué states.

Under the agreement, KRA will reduce the benchmark for general consolidated cargo to Sh2 million.

However, existing rates for ready-made garments, footwear and fabrics will remain unchanged, while negotiated rates for air cargo will continue to apply.

The Government will also remove the Advance Cargo Declaration requirement in an effort to streamline clearance and facilitate legitimate trade.

KRA has been tasked with developing and publishing an exclusion list identifying goods that will not qualify under the general consolidated cargo framework.

The list will take into account the value and nature of goods,  specific tax rates, excisable goods and other customs and revenue considerations.

The measures also target concerns surrounding cargo consolidators where all consolidators will be vetted and registered afresh by KRA and required to provide comprehensive details of individual traders and importers whose goods they handle.

The exercise, including submission of trader disclosures, must be completed by October 15, 2026.

The Government will further facilitate designated de-consolidation centres in Nairobi and Mombasa to allow goods to be separated efficiently and transparently while reducing logistical and administrative costs.

In a major cost-cutting measure, Kenya Railways will immediately slash the charge for transporting cargo from the Inland Container Depot to the Bomaline De-consolidation Centre from Sh58,000 to Sh10,000.

The Government also pledged to expand legislation reserving retail trade and specified lower-level jobs for Kenyans, while continuing to encourage foreign investment that brings capital, technology, value addition and quality employment.

National and county governments will work together to improve the business environment through initiatives including the County Aggregation and Industrial Parks programme and protect legitimate businesses from harassment and disruption.

A multi-stakeholder committee chaired by the Cabinet Secretary for Investments, Trade and Industry will oversee implementation, address emerging challenges and report quarterly to the President.

The Government said the agreement marks a new partnership with traders based on “consultation, predictability, compliance and mutual responsibility,” while traders and consolidators will be expected to comply with customs and tax requirements.