High customs duties and taxes in Kenya have sparked widespread discontent among netizens who have taken to social media to express their outrage with some even abandoning their shipped items at the Kenya Revenue Authority (KRA).
One Twitter user, @Nickanali, shared that customs was asking him to pay Ksh.23,940 (approximately $160) in duties and taxes for a test product worth less than $90. His reaction to the duties? “LOL.” and LOL did other Kenyans also show up with similar grievances?
Another Twitter user, @bountyedu, said that he was gifted a pair of leather Clarks shoes from the US, but customs wanted him to pay Ksh.12,000 (approximately $100) in duties and taxes before he could pick them up. He said that he left the shoes at customs and told them to keep them.
Other Kenyans shared similar stories of having to pay exorbitant customs taxes on shipped items, with some even abandoning their items at the KRA.
One Twitter user, @Rwayodi, said that he wanted to buy an item worth $180, but the shipping cost alone would be at least $385. “shipping math in Kenya does not add up,” he lamented.
@Kimobrian254 said that he bought car gear bushes worth $120 from Estonia, but the KRA wanted to charge him Ksh.7,000 (approximately $60) in customs duties. He said that he showed the KRA the bushes and told them to keep them, then went to a local blacksmith who made him the bushes for Ksh.150 (approximately $1.50) each.
These are just a few examples of the many Kenyans who are being affected by the exploitative customs taxes. The situation has become so bad that most Kenyans are just abandoning their shipped items to KRA who then auction them.
For instance, @noelkitonga, says that a family friend once sent them gifts for a newborn baby, but they were charged a price that was beyond the value of the clothes. Had not been for the sentimental value of the gifts, he would also have left them at customs.
Been a few months. Here’s the document I need to return once payment is done
I remember asking the person there “Do you think these high costs make sense for something that cheap?” And they said, “The person who just left paid 70k to pick their phone. Wakenya wako na pesa.” pic.twitter.com/BzhU6FFsAC
— Dickson Otieno (@DicksonOtieno) October 26, 2023
Customs duties in Kenya are calculated based on several factors and can range from 0% to 100%. Here’s a breakdown of how they are calculated:
- Customs Duty: This is a tax imposed on all goods brought into Kenya. It is paid at the port of entry and is levied at rates between 0 and 25%.
- Excise Duty: This is a tax imposed on high-volume daily goods of a luxurious nature like alcoholic beverages and cigarettes. Excise duty is charged on wine or alcoholic beverages at a rate per liter, and is paid in addition to customs duty.
- Value Added Tax (VAT): VAT is charged on imported taxable goods, at a rate of 16%. It is levied on the total CIF (Cost, Insurance, and Freight) value, customs duty, and other applicable charges.
- Import Declaration Fees (IDF): This is a levy charged on all imported goods. In Kenya, IDF is charged at 2%.
- Railway Development Fee (RDF): This levy is charged on goods imported for home use to provide funds for the construction of the Standard Gauge Railway. It is currently charged at a rate of 1.5%.
For specific items like cars, the value of a model is calculated based on the Current Retail Selling Price (CRSP) for that specific model, adjusted for depreciation at a rate of 10 percent per year. Insurance and freight charges are added to the adjusted CRSP to arrive at the customs value.
According to my research, customs taxes in Kenya are calculated based on the Cost, Insurance, and Freight (CIF) value of the imported goods. The CIF value is the total value of the goods, including the purchase price, insurance costs, and freight charges.
The customs duty rate is determined by the East African Community Common External Tariff (CET), which is a harmonized tariff schedule for all East African Community (EAC) member states. The CET duty rates range from 0% to 25%, with some sensitive items attracting higher duties.
Customs duty = CIF value * Customs duty rate VAT = (CIF value + Customs duty) * VAT rate
For example, if you import a product with a CIF value of Ksh.10,000 and a customs duty rate of 25%, you would be required to pay Ksh.2,500 in customs duty. You would also be required to pay Ksh.2,400 in VAT, for a total of Ksh.4,900 in customs taxes.
It is important to note that there are some exemptions from customs duty and VAT. For example, personal effects and goods imported for educational purposes are exempt from customs duty. You can find a list of all customs exemptions on the Kenya Revenue Authority (KRA) website.
Please note that these rates may be incorrect and it’s always best to check with the Kenya Revenue Authority or a customs broker for the most accurate and up-to-date information.
Kenyans Call for Change
How then goods are attracting customs duties and charges more than the actual products RRP is a question only the KRA can answer.
Kenyans have now called on the government to review these customs duties and taxes, which they say are too high and unfair. They argue that the high taxes are discouraging people from shopping online and are also making it difficult for businesses to import goods.
The Kenyan government has not yet responded to the public outcry over the high customs taxes. However, the issue is a major concern for Kenyans. It remains to be seen whether the government will take any steps to address the problem.