Although the Kenya Revenue Authority has said the directive is not new, it has triggered confusion and concern, with some complaining of harassment by customs agents at the airport.
The KRA said in a post earlier this week on X, formerly Twitter, that individuals are allowed to bring in personal or household items worth $500 or below.
"Anything above the amount shall be subjected to tax," it said.
President William Ruto's government has imposed a range of new taxes to try to replenish the depleted public purse, but the measures have triggered anger among Kenyans as they also battle rising prices and a plunging local currency.
Tourism Minister Alfred Mutua warned that people could be deterred from coming to the East African nation, which attracts visitors from across the world to its wildlife parks and Indian Ocean beaches.
"We harass our visitors when they come to this country, at the airport, and we wonder why they don't come back," he said in a video posted online by several media outlets on Wednesday.
"You go to Rwanda, they don't harass you... when you go to South Africa they don't harass you. In Dubai, they don't harass you."
- 'National shame' -
Senate majority leader Aaron Cheruiyot said on X that KRA searches of passengers at the main international airport in Nairobi were a "national shame" and called for clarity to distinguish between personal and commercial items.
Another senior lawmaker, Nelson Koech, said the measures came at a time when Kenya was still trying to boost the tourism sector, a key generator of foreign currency earnings that was hit hard by the Covid-19 pandemic.
"This is not the time to be threatening those coming to Kenya," he was quoted by local media as saying.
The number of tourist arrivals last year rose to 1.54 million although remained below pre-pandemic levels, according to tourism ministry figures.
Kenya Tourism Board chair Francis Gichaba voiced hope Wednesday that the figure could top two million this financial year, surpassing the 2019 figure of 1.9 million.
The board also said in a statement that by June 2028 it was aiming for 5.5 million international tourist arrivals and for the sector to contribute one trillion shillings ($6.6 billion) a year.
That compares with more than $2 billion in 2022.
The government said in May last year that tourism earnings made up almost 10 percent of Kenya's gross domestic product before Covid-19 devastated international travel.
Earlier this month, Ruto said at a conference in Congo-Brazzaville that by the end of the year "no African will be required to have a visa to come to Kenya," although no measures have been formally announced.
And at a climate summit in Nairobi in September, Ruto also said Kenya was considering abolishing visa requirements for all foreign nationals.