Many importers find out the real cost of their goods only when the clearing agent sends the bill. A simple method lets you estimate the taxes before you place the order, so you can price with confidence. Here is the method, with an example.

The pieces you need

  1. Customs value. The value of the goods for customs purposes, usually the price paid plus freight and insurance to the Kenyan port or airport; this is the CIF value.
  2. Duty rate. A percentage set for each product by its tariff classification (the HS code).
  3. Levies and fees. Import Declaration Fee and Railway Development Levy, each a percentage of the customs value.
  4. VAT. Charged on the customs value plus duty and any excise.

Step 1: find the customs value

Take the invoice price and add the cost of shipping and insurance to Kenya. If the goods cost KES 1,000,000 and freight and insurance are KES 150,000, the customs value is KES 1,150,000. Convert foreign currency at the rate customs uses, not the bank rate you got.

Step 2: find the duty rate

Look up your product's HS code in the EAC Common External Tariff. Most goods fall under three main rates: 0% for raw materials and capital goods, 10% for intermediate goods and 25% for finished goods, with higher rates for some sensitive products. See the EAC common external tariff explained. Ask your clearing agent to confirm the code, because the wrong code means the wrong tax.

Step 3: calculate each part

For finished goods at 25% on a customs value of KES 1,150,000:

  • Import duty: 25% x 1,150,000 = KES 287,500
  • Import Declaration Fee at 2.5%: KES 28,750
  • Railway Development Levy at 2%: KES 23,000
  • VAT at 16% on (customs value + duty) = 16% x 1,437,500 = KES 230,000

Total taxes and fees: KES 569,250, on top of the goods, which gives a landed cost of about KES 1,719,250 before clearing and local transport. See IDF and RDL explained for the fees.

Step 4: add the other costs

Add the clearing agent's fee, port or airport charges, inspection and transport to your premises. The total is your landed cost.

Use the tools

The import duty calculator does this for any goods, and the landed cost calculator adds shipping and clearing. For a whole shipment with several items, the import duty and landed cost workbook works out duty, fees, VAT and cost per unit and the cost after recoverable VAT.

VAT you may be able to claim back

If you are VAT-registered and import for your business, the VAT paid on the import entry is input VAT you can claim, so it is a cash-flow cost, not a final cost. See importing goods for resale: VAT and records.

Vehicles and special goods

Cars and motorcycles have special valuation and excise rules; see how much it costs to import a car and importing a motorcycle. Alcohol, tobacco, fuel and some other goods carry excise duty as well; see excise duty on imports.

Check before you order

Run the numbers first and then decide on the selling price; see how to price your products and services. Ways to cut the bill legally are in how to lower your landed cost legally.

Rates change with each Finance Act and the EAC tariff. Confirm them with KRA or a licensed clearing agent.