KRA SLASHES IMPORT DUTY EXEMPTIONS ON BASIC FOOD ITEMS TO BOOST REVENUE

The Kenya Revenue Authority (KRA) has slashed import duty exemptions on key basic food commodities in a bold move aimed at generating more revenue and sealing tax loopholes.
The exemptions—previously applied to essential items such as sugar, rice, and cooking oil—have been reduced by 37.4%, resulting in a significant boost to the country’s tax collections. According to KRA, this policy shift is part of the government’s Medium-Term Revenue Strategy (MTRS), which seeks to reduce dependence on borrowing by strengthening domestic resource mobilization.
Customs revenue has already recorded a sharp uptick, with import duty revenue rising by 18.3% to Ksh 157.9 billion. Non-oil tax revenue also increased by 10.3%, reaching Ksh 541.1 billion in the same period. January 2025 saw KRA collect a record-breaking Ksh 82.5 billion in customs revenue—121.1% of its monthly target.
KRA Commissioner General Humphrey Wattanga said the decision follows growing concerns over abuse of exemptions and the need to streamline the tax system. “We are committed to closing leakages in the tax framework while ensuring fairness and equity,” Wattanga said.
Analysts, however, warn that the reduction in exemptions may lead to increased retail prices of food commodities, further burdening households already grappling with inflation.
The taxman says it will continue leveraging technology and enforcement tools such as eTIMS and enhanced scanning systems at border points to maintain revenue momentum.
This development marks a major policy shift as the country looks inward to fund development, with the Treasury aiming to increase the tax-to-GDP ratio by 3 percentage points by 2027.