John Mbadi Says Mitumba Tax Proposal Will Return Through Finance Bill Amendments

Treasury Cabinet Secretary John Mbadi has confirmed that a proposed simplified tax on mitumba imports was left out of the Finance Bill 2026, but the government plans to reintroduce it through amendments during parliamentary debate.

The proposal would introduce a deemed profit model aimed at simplifying tax compliance for second-hand clothing traders rather than increasing revenue. Under the plan, 5 per cent of the customs value of imported mitumba would be treated as profit and taxed at the corporate rate of 30 percent. This would result in an effective income tax rate of 1.5 percent.

Mbadi said the system would replace the current structure, which requires traders to pay import duties and later comply with separate income tax requirements, including filing returns and hiring accountants. According to the Cabinet Secretary, the proposal followed consultations with mitumba traders, who raised concerns about the complexity of the existing tax system. 

He said traders preferred a single payment at the point of entry that would remove the need for additional tax demands later. Some critics argue that the levy could increase the cost of second-hand clothing. 

Mbadi rejected those concerns, saying traders would likely pay more under the current income tax framework than under the proposed 1.5 percent effective rate. He added that the model would lower compliance costs and provide greater certainty for businesses operating in the informal sector.

The government maintains that the proposal is based on public participation, but any attempt to reintroduce it will require approval from Parliament.