The Kenya Revenue Authority KRA Customs Department has set a new benchmark in revenue collection, announcing a record-breaking Ksh 879.3 billion and a daily collection record of Ksh 3.5 billion for the 2024/25 financial year. This historic achievement underscores the agency’s evolving efficiency, strategic policy implementation, and robust stakeholder collaboration in the management of cross-border trade. It also signals a broader shift in Kenya’s tax administration landscape, one that is increasingly data-driven, digitally powered, and rooted in long-term fiscal sustainability.
At the heart of this success lies a meticulously executed customs modernisation agenda. Over the past decade, KRA Customs has consistently invested in smart infrastructure, capacity building, and systems integration aimed at reducing leakages and improving the efficiency of tax collection. The 2024/25 results, however, mark a major inflexion point, not only in terms of raw revenue numbers but also in the transformation of KRA into a leaner, smarter institution capable of unlocking value across the country’s trade corridors.
A New Benchmark For KRA Customs
This record-breaking performance by the Customs Department was largely driven by an uptick in trade volumes, better valuation processes, tighter enforcement against smuggling and dumping, and the full digitisation of customs operations through the Integrated Customs Management System (iCMS). These advancements allowed KRA to monitor container movements and cargo declarations in real-time, cutting down on human interference and enabling early detection of fraud. The deployment of non-intrusive inspection (NII) technology at key entry points such as the Port of Mombasa, Jomo Kenyatta International Airport, and border posts in Busia, Namanga, and Malaba has dramatically improved cargo profiling and led to faster clearance times.
More importantly, this performance is reflective of improved policy coherence between the National Treasury, KRA, and other trade facilitation bodies. The Customs and Border Control Department has worked hand-in-hand with the Kenya Ports Authority (KPA), the Kenya Bureau of Standards (KEBS), and the Anti-Counterfeit Authority to ensure that tax collection is embedded in a wider ecosystem of compliance, trade security, and consumer protection. This collaborative approach has ensured that revenue collection is not just a back-end activity but an integral part of trade facilitation.
Standout Contributors to KRA Customs Record Revenue
Among the standout contributors to this year’s customs revenue were petroleum products, motor vehicles, industrial machinery, and food commodities. Kenya’s steady demand for refined petroleum, especially diesel and super petrol, has remained high, contributing significantly to import duty, petroleum development levies, and VAT collected at entry points. Similarly, the country’s construction and manufacturing sectors continued to import machinery and intermediate inputs, which generated additional revenue streams through import duty, excise duty, and railway development levies.
The automotive sector also played a pivotal role. As middle-income households expanded, the demand for personal vehicles rose, bringing in revenue through excise tax, import duty, VAT, and the controversial annual motor vehicle circulation fee. While this growth offers fiscal benefits, it also reignites the debate on how Kenya balances revenue generation with environmental goals, as most imports remain second-hand vehicles with lower emissions standards. This tension between short-term revenue and long-term climate policy is one that the government must increasingly navigate as it crafts future customs policy.
The food import bill, especially in a year marked by weather-driven agricultural challenges, also helped boost customs revenue. The importation of maize, rice, and wheat contributed both import and value-added tax, although critics argue that heavy reliance on food imports undermines local agricultural resilience. Nonetheless, from a fiscal perspective, the KRA Customs Department was able to maximise returns from these import surges while ensuring compliance with food safety standards.
KRA customs performance should also be seen against the backdrop of broader reforms in tax administration. Over the past three years, the agency has undergone an extensive transformation agenda guided by its 8th Corporate Plan. This blueprint emphasises three strategic pillars: enhancing revenue mobilisation, improving tax compliance, and strengthening institutional capacity. Digitisation is the common thread that runs across all three areas.
The rollout of iTax, now fully integrated with iCMS and the electronic cargo tracking system (ECTS), has helped seal critical loopholes in the tax collection process. KRA Customs now receives real-time data on cargo movements from port to inland destination, and can cross-check trader declarations against actual cargo manifests and bank records. This level of visibility was previously impossible and has significantly reduced fraud linked to under-declaration and misclassification of goods.
How Risk-based Audit Contributed To KRA Customs Record Performance
Another factor that bolstered KRA’s 2024/25 performance is the agency’s aggressive risk-based audit and enforcement model. By leveraging data analytics and artificial intelligence, Customs has increasingly focused on high-risk consignments, traders, and shipping lines. The creation of a centralised Risk Management Unit within KRA Customs has helped profile importers and identify trends in dumping, tax avoidance, and transhipment fraud. This targeted approach minimises unnecessary inspections while improving the quality of audits, leading to higher collections with lower operational strain.
What stands out in the 2024/25 numbers is also the gradual shift in mindset within KRA, from policing to partnership. The KRA Customs Department has stepped up its engagement with private sector players, including shipping lines, clearing agents, logistics firms, and importers. Through quarterly stakeholder meetings, capacity-building forums, and feedback loops, KRA has positioned itself as a facilitator of trade rather than an obstacle. This soft power approach has improved voluntary compliance and reduced the adversarial relationship that once defined customs-taxpayer dynamics.
But as Kenya celebrates this milestone, there are questions about sustainability. Can KRA maintain this upward trajectory year after year without overburdening the same set of taxpayers or compromising economic competitiveness? That challenge goes to the heart of Kenya’s evolving tax policy and the delicate balance between expanding the tax base and protecting economic growth.
For KRA Customs to remain effective and relevant, it must continue to innovate around tax base expansion, particularly in areas such as the informal economy, e-commerce, and digital services. While customs offers immediate cash flows, domestic tax revenue remains more sustainable in the long run. This is why harmonising customs and domestic tax intelligence remains critical. Seamless integration between KRA’s Customs and Domestic Taxes Departments, supported by data-sharing and joint audits, will enhance risk profiling and revenue recovery.
Equally crucial is the need to address the political economy of taxation in Kenya. The perception that taxes are not efficiently utilised continues to undermine compliance. Kenyans often ask: Where does the money go? While KRA is a collector, not a spender, the transparency of public expenditure and the visibility of development projects funded through taxes have a direct impact on public willingness to comply. National and county governments must do more to communicate how collected taxes are used to fund health, education, infrastructure, and security.
How Is Tax Collection Done By KRA Customs?
The process of tax collection is itself elaborate. For example, from the moment a container lands at the Port of Mombasa or crosses the Namanga border, it undergoes a sequence of verification, risk assessment, duty computation, and clearance. KRA officials work with Kenya Ports Authority, KEBS, and the National Intelligence Service to vet goods and flag any risks. Once cleared, duties are paid electronically, often via mobile money or through the banking system, with receipts automatically reflected in KRA’s ledger. This automation has improved audit trails, reduced human discretion, and enhanced trust in the system.
However, the bigger story is not how taxes are collected, but how tax justice can be achieved. Kenya’s tax policy must remain anchored on equity, progressivity, and predictability. The burden must not fall disproportionately on small traders or low-income earners. There is also a case for reforming the Excise Duty regime, which has become increasingly punitive, especially for the alcohol, tobacco, and mobile money sectors. While excise tax is a powerful tool for behaviour change and revenue, overuse can stifle innovation and drive informalization.
In the coming years, Kenya’s ability to meet its fiscal targets will depend on whether institutions like KRA can maintain public trust, embrace innovation, and work collaboratively across government. Customs will remain a key revenue driver, especially given Kenya’s status as a regional trade hub. But over-reliance on customs revenue can expose the country to global supply shocks and trade slowdowns. That is why KRA must continue to deepen domestic revenue mobilisation efforts while improving the efficiency of its existing systems.
The 2024/25 customs revenue record is not just a number; it is a signal that institutions can deliver results when given the tools, policy support, and accountability mechanisms needed to thrive. It is a call to continue building a modern, fair, and efficient tax system that supports Kenya’s development aspirations while respecting the social contract between government and citizen.
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