By Jackie Adhyambo
The recent outcry over the revised minimum yield for consolidated cargo is informed by a misunderstanding that has obscured the economic realities that made the adjustment both necessary and long overdue. The figure of Ksh. 3.2 million is not, as some have claimed, a new tax imposed upon small traders. Rather, it is a benchmark, and a reference point used to determine which consolidated containers require further verification.
The actual tax liability remains governed by law and is assessed on the transaction value of the goods. What has changed is the yardstick against which consignments are measured. That change reflects a macroeconomic environment that has shifted dramatically since the last review.
When the benchmark was set at Ksh 2.2 million in 2020, the shilling traded at an average of 106.47 to the dollar. By July 2026, that average had drifted to 129.29, itself a depreciation of over 20%, with a painful peak of 159.72 in January 2024. Customs values are struck in shillings, which means that depreciation feeds directly into the yield. A container that cost Ksh 4.9 million in 2020 now costs approximately Ksh 6.4 million, an increase of over 30%. The benchmark, frozen for three years, simply did not reflect this new reality.
Freight charges tell a similar story. The Drewry World Container Index, which stood at approximately US$ 1,450 per 40-foot container in the 2019/20 period, had risen to US$ 2,712 by May 2026, an increase of nearly 87%. Freight and insurance are dutiable elements of the customs value under the Fourth Schedule of the East African Community Customs Management Act. When the cost of shipping rises so steeply, the value of the goods being shipped rises with it. A benchmark that ignores this movement becomes an instrument of revenue loss rather than trade facilitation.
Statutory changes have compounded the taxation pressures of the moment. Since January 2022, a succession of Finance Acts and EAC Gazette notices has introduced new levies, adjusted existing ones, and expanded the taxable base. The Export and Investment Promotion Levy, introduced in 2023 and extended in subsequent years, now applies to ceramic products and certain steel ingots.
The Railway Development Levy was restored from 1.5 per cent to 2.0 per cent in 2024. The Finance Act of 2026 extended the customs valuation machinery to all Part III fees and levies and introduced new excise duties on wood panels, showerheads, and ceramic sanitary fixtures. The EAC Gazette for the 2026/27 fiscal year raised tariffs on furniture from 35 to 45 per cent and on mobile phones from zero to 25 per cent. Each of these changes, individually modest, collectively transformed the fiscal landscape within which consolidated cargo is cleared.
The revision from Ksh 2.5 million to Ksh 3.2 million represents an adjustment of less than 30% at a time when the cumulative consumer price index has risen by nearly 45% since the end of 2019. Measured against the movement in exchange rates, freight charges, and statutory levies, the new benchmark is not punitive. In fact, it is conservative because it remains below the potential tax liability of many containers, which, depending on the nature and value of the goods may range from Ksh 5 million to Ksh 10 million.
The new numbers were not imposed unilaterally. Extensive consultations were held with industry stakeholders, and the revised benchmark was agreed with trader representatives in July 2026. When those stakeholders requested additional time to prepare, KRA granted a one-month grace period. This is not the conduct of an authority at war with small traders. It is the conduct of an institution seeking to balance trade facilitation with the protection of Government revenue.
The fairness of the new benchmark lies precisely in its responsiveness to reality. A frozen figure would have invited abuse, allowing high-value goods to be concealed within consolidated consignments and cleared at rates that bear no relation to their actual worth.
The adjustment protects the integrity of the consolidation framework, ensuring that it remains a genuine facilitation measure rather than a loophole. Small traders are not the victims of this revision. In truth, they are its beneficiaries particularly given that a system that is fair is one that endures.
Adhyambo is a Nakuru-based knowledge management consultant.