Govt slashes cargo rail charge by Sh48K, sets benchmark to Sh2mn in new trader deal

The government has reduced the applicable benchmark for general consolidated cargo from Sh2.5 million to Sh2 million following consultations between President William Ruto, traders and stakeholders in the consolidated cargo sector.

The reduction is part of an agreement reached between the government and traders on Wednesday, September 2, to address concerns over taxation, cargo clearance and handling, as well as the rising cost of doing business for small and medium-sized enterprises.

Under the agreement, the Kenya Revenue Authority (KRA) will apply the new Sh2 million benchmark to general consolidated cargo.

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

The government will also remove the Advance Cargo Declaration requirement as part of measures intended to streamline cargo clearance and facilitate legitimate trade.

The agreement follows disagreements between traders and KRA over the applicable benchmark for consolidated cargo, which had raised concerns among traders about the cost of importing goods.

As part of the new framework, KRA will develop and publish an exclusion list identifying goods that will not qualify for clearance under the general consolidated cargo arrangement.

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

According to the agreement, the exclusion list is intended to give traders and consolidators clarity on which goods can be consolidated and ensure that the framework is applied consistently.

The government has also ordered the fresh vetting and registration of all cargo consolidators.

Under the new requirements, consolidators will have to provide KRA with a comprehensive list of individual traders and importers whose goods they consolidate.

The deadline for completing the registration and vetting exercise and submitting the required trader disclosures has been set for October 15, 2026.

Another major intervention will involve the establishment and operation of designated de-consolidation centres in Nairobi and Mombasa.

The centres are expected to facilitate the separation of consolidated cargo for individual traders while improving cargo handling and clearance and reducing logistical and administrative costs.

The agreement also immediately lowers the cost of transporting cargo from the Inland Container Depot (ICD) to the Bomaline De-consolidation Centre.

Kenya Railways will reduce the charge from Sh58,000 to Sh10,000, representing a Sh48,000 reduction in the applicable charge.

Traders and the government have further agreed to measures addressing the participation of foreign nationals in the Kenyan economy.

In addition, the government will expand existing legislation to reserve retail trade and specified lower-level jobs for Kenyans while defining areas where foreign participation will be permitted.

At the same time, foreign investment that brings capital, technology, value addition and quality jobs will continue to be encouraged.

The national government will also work with county governments to create a more conducive business environment, including through the County Aggregation and Industrial Parks (CAIPs) programme.

The agreement further commits the government to protecting legitimate businesses from unnecessary harassment, intimidation and disruption.

To monitor implementation, a multi-stakeholder committee chaired by the Cabinet Secretary for Investments, Trade and Industry will be established.

The committee will bring together KRA, relevant government agencies, traders, consolidators and other stakeholders. It will oversee implementation of the agreed measures, address emerging issues and submit quarterly progress reports to President Ruto.

The government said traders, importers, manufacturers, logistics operators and micro, small and medium enterprises remain an essential pillar of the economy.

Under the agreement, traders and consolidators will be required to comply with customs and tax requirements and operate within the agreed framework.

The government, in turn, will continue simplifying trade procedures, lowering unnecessary costs, improving infrastructure and creating an enabling environment for legitimate businesses to grow.