Hundreds of small-scale traders shut their shops and took to the streets of central Nairobi on Friday, protesting a 28 per cent rise in the customs tax.

Footage shows tear gas filling streets in central Nairobi as police dispersed protesters marching with banners, placards and Kenyan flags, while blowing vuvuzelas.

Shops were shuttered along major commercial streets as demonstrators moved towards Times Tower, the Kenya Revenue Authority's headquarters.

"We are here today because of the oppression of our businesses. We are saying enough is enough. We will not allow the cost of containers to be increased." 

"Even if they throw tear gas, Ruto will only serve one term. Ruto must go."

The Kenya Revenue Authority raised the minimum customs benchmark for a 40-foot container of consolidated general cargo from KES2.5 million to KES3.2 million, an increase of KES700.000, or 28%. The revised benchmark took effect on August 20.

Traders from commercial hubs, including Kamukunji, Gikomba and Nyamakima, joined the protest, arguing that the higher benchmark would increase import costs and squeeze already narrow profit margins.

The KRA has rejected claims that every consolidated container will automatically be valued or taxed at KES3.2 million.

The authority says the figure is a minimum reference point used for customs risk management, while the actual customs value and tax liability depend on the goods, their value and classification.

Commissioner for Customs and Border Control Lilian Nyawanda said cargo can be inspected where an importer disputes the benchmark, with the actual contents, classification and taxes payable then determined.

The KRA says the revised benchmark is intended to tackle under-declaration and undervaluation of imports, protect government revenue and reduce unfair competition for businesses that declare goods accurately.