NAIROBI, Kenya- Parts of Nairobi’s Central Business District descended into chaos on Friday after police fired tear gas to disperse traders protesting the Kenya Revenue Authority’s (KRA) revised customs benchmark for imported goods.
Hundreds of traders took to the streets after shutting businesses in parts of the CBD to oppose the increase in the minimum customs benchmark for consolidated cargo from Sh2.5 million to Sh3.2 million.
Police fired tear gas at the protesting traders, while hundreds of businesses in central Nairobi remained closed either as part of the protest or because of safety concerns.
The traders had gathered in the city centre before moving towards Times Tower, the headquarters of KRA, to demand a reversal of the new benchmark.
Earlier reports showed that several businesses along major streets including Moi Avenue, Kenyatta Avenue and Tom Mboya Street had closed as traders responded to calls for a shutdown.
The protests are largely being driven by traders from Kamukunji, Gikomba and Nyamakima, many of whom rely on consolidated cargo to import merchandise.
They argue that the new benchmark will increase their importation and clearance costs and further squeeze already thin business margins.
The new benchmark represents a 28 per cent increase, or Sh700,000, from the previous Sh2.5 million minimum.
KRA, however, has insisted that the Sh3.2 million figure is not a flat tax imposed on every container.
In a clarification issued on August 27, the authority said the figure is a minimum yield used as a risk-management reference under a simplified customs clearance arrangement.
The actual tax liability, KRA said, depends on the nature, value and classification of the goods in a shipment.
KRA said the revised benchmark was introduced after changes in exchange rates, freight charges and national and East African Community tax laws.
The authority also said the measure was intended to tackle customs practices including undervaluation, under-declaration, misdescription and misclassification of imported goods.
But traders maintain that the policy will make it more expensive for small businesses to bring goods into Kenya.
