Fresh Mitumba Tax Battle as Treasury Pushes MPs to Reverse Decision
John Mbadi and the National Treasury are seeking to reinstate the proposed mitumba tax after Members of Parliament removed it from the Finance Bill 2026, arguing that the proposal was intended to simplify taxation for second-hand clothes traders rather than increase their burden.
John Mbadi and the National Treasury are seeking to reinstate the proposed mitumba tax after Members of Parliament removed it from the Finance Bill 2026, arguing that the proposal was intended to simplify taxation for second-hand clothes traders rather than increase their burden.
The proposal, which had initially been included in the draft Finance Bill, sought to introduce a one-off taxation model for mitumba imports at the point of entry.
Under the system, the government would treat five per cent of the customs value of imported clothes as presumed profit and apply a 30 per cent income tax on that amount, translating to an effective tax rate of 1.5 per cent.
Treasury Says MitumbaTraders Requested Simpler Tax Model
According to Treasury Cabinet Secretary John Mbadi, the proposal was informed by concerns raised by mitumba traders who complained about the current tax system, which requires them to pay multiple charges and later file income tax returns based on profits.
He argued that the current process is expensive and cumbersome, forcing traders to incur additional costs such as hiring accountants to comply with tax obligations.
Mbadi maintained that the proposed levy was designed to allow traders to settle taxes once at the port of entry and avoid future demands from tax authorities. Treasury officials say the model would also improve compliance and reduce disputes between traders and tax agencies.
MPs Removed Proposal from Finance Bill
However, the proposal faced resistance in Parliament, with the National Assembly Finance Committee deleting the tax provision from the revised Finance Bill amid concerns over its impact on the cost of second-hand clothes and low-income consumers. Some critics argued the levy could lead to higher prices in the mitumba market.
Despite the setback, Treasury has signaled plans to push for amendments in Parliament to reintroduce the proposal, insisting it was aimed at streamlining taxation rather than creating a new financial burden on traders.
