Kenya's official import data for goods from China in 2025 falls short by Sh629 billion compared to China's export figures, highlighting a significant discrepancy that raises concerns over potential revenue leakages and customs under-declaration.

Discrepancy Details

According to the General Administration of Customs of China (GACC), exports to Kenya reached Sh1.3 trillion in 2025. However, the Kenya Revenue Authority (KRA) recorded only Sh672 billion worth of imports from China during the same period. This gap of nearly half the reported export value has persisted for at least five consecutive years, cumulatively amounting to Sh2.76 trillion in unaccounted goods between 2021 and 2025.

Implications for Revenue and Trade

China remains Kenya's largest source of imports, supplying a wide range of finished goods including electronics and clothing. Customs duties on these imports constitute a major portion of government revenue, with the KRA collecting Sh733.7 billion in customs taxes in the first nine months of the 2025/26 fiscal year, representing 36% of total tax collections.

Experts suggest that the persistent import-export gap could be due to under-declaration, trade mis-invoicing, or smuggling, all of which may lead to substantial losses in tax revenue and undermine regulatory enforcement.

Government Response

The Treasury has acknowledged the issue and plans to enhance collaboration between the KRA and international tax authorities to verify the true value of high-risk imports from China. This includes establishing frameworks for exchange of information to combat mis-invoicing and transfer pricing abuses, particularly for electronics and other commonly imported goods.

Expert Analysis

  • Churchill Ogutu, economist: "A gap of this magnitude suggests significant revenue leakages and calls for stronger customs controls."
  • Scholars note that such discrepancies often stem from illicit trade practices, including smuggling and undervaluation of imports to evade taxes.

While minor differences in trade statistics can arise from timing, exchange rates, or routing through third countries, the scale and consistency of this gap warrant urgent scrutiny to safeguard Kenya’s revenue base.