Kenyan Traders Protest Import Duty Hike As Police Fire Tear Gas In Nairobi

Police in Nairobi, Kenya, fired tear gas to disperse small-scale traders protesting against a new import duty increase, while hundreds of businesses reportedly shut down in central Nairobi. The Kenya Revenue Authority said the measure, which took effect on August 20, is intended to prevent the under-declaration and undervaluation of imported goods and protect compliant businesses and local manufacturers. Traders, however, say the higher customs benchmark will increase import costs and put pressure on small businesses that depend on consolidated shipments. The minimum customs benchmark for a consolidated 40-foot container has risen from 2.5 million to 3.2 million Kenyan shillings ($24,700). Authorities stressed that the figure is a minimum reference point rather than a fixed value for every container.

Police fired tear gas to disperse small-scale traders protesting against a recent increase in import duties in Kenya, while hundreds of businesses reportedly closed in central Nairobi, Reuters reported on Friday.
The protests followed a decision by the Kenya Revenue Authority (KRA) to increase the customs benchmark for consolidated imports from August 20.

TRADERS WARN OF HIGHER COSTS

Small-scale traders say the new policy will make it more expensive to clear imported goods and could put additional pressure on businesses already operating on tight margins.
Many of the affected traders rely on consolidated shipments, in which goods belonging to several importers are combined in one container to reduce transportation and import costs.
They argue that the higher customs benchmark could undermine that arrangement and force them to pass additional costs on to consumers.

GOVERNMENT DEFENDS THE NEW MEASURE

The Kenya Revenue Authority said the increase was introduced to tackle the under-declaration and undervaluation of imports.
According to the authority, some importers have been declaring goods below their actual value in order to reduce the amount of duty they pay.
KRA said this practice disadvantages businesses that comply with customs requirements and puts local manufacturers at a competitive disadvantage.

CUSTOMS BENCHMARK RAISED

Under the new system, the minimum customs benchmark for a consolidated 40-foot container has increased from 2.5 million Kenyan shillings to 3.2 million shillings, equivalent to about $24,700.
The authority stressed that the 3.2 million shilling figure is a minimum reference point rather than a fixed value applied to every container.
Importers whose goods are worth more than the benchmark are required to declare their actual value and pay the applicable duties.

POLICE RESPONSE SPARKS CONCERN

The use of tear gas to disperse the protesting traders has added to tensions in Nairobi.
Police did not immediately respond to requests for comment regarding the demonstrations.
The protests also prompted widespread business closures in parts of central Nairobi, highlighting the level of concern among traders over the new customs measures.

SMALL BUSINESSES CAUGHT BETWEEN COMPETING PRIORITIES

The dispute reflects a wider challenge facing Kenya as authorities attempt to strengthen tax and customs collection while protecting small businesses from rising operating costs.
The government says stronger customs enforcement is necessary to create a fairer trading environment and protect legitimate businesses and local manufacturers.
Traders, however, fear that the policy could increase the cost of doing business and threaten the survival of smaller enterprises that depend heavily on affordable imports.
The situation is likely to remain closely watched as traders and authorities seek to resolve their differences over how the new customs rules should be implemented.