Mitumba traders in the country have thrown their weight behind the Finance Bill 2026 describing the proposed tax framework for the sector as fair and reasonable.
The Mitumba Consortium Association of Kenya (MCAK), specifically gave a thumbs up for the proposal to make a one-time final tax payment at port of entry based on the presumed 5 percent profit margin taxed at 30 percent.
The association called on parliament to pass the proposal without delay saying it has simplified tax structure, making it payable at the point of entry adding that it reduces multiple taxation layers, arbitrary assessments, and compliance burdens on small traders.
“Association calls on Parliament to approve the framework describing it as a fair, practical and livelihood-protective measure for Kenya’s two-million strong mitumba value chain,” MCAK chairperson Teresia Njenga said in a statement to newsrooms.
“Mitumba traders have endured significant hardship from arbitrary assessments and extortion by KRA and auditors targeting law-abiding Kenyans. We requested a simplified tax plan from the Treasury precisely to give every importer a clear and honest pathway to pay income taxes,” she said.
The tax simplifies compliance assessments by replacing multiple levels and arbitrary Importation single, transparent charge at the point of importation, it said, adding that the proposal would open the sector for growth.
At the same time, the MCAK boss said that the new tax proposals safeguards livelihoods while supporting national predictable economic growth and sector formalization.
“Formalisation of the sector is expected to unlock access to credit insurance, and government support programmes,” MCAK said, adding that mitumba business and local textile manufacturing can coexist under a balanced policy framework.
MCAK further emphasised that the measure is significantly more reasonable than extreme alternatives– punitive tariffs– that would threaten jobs, small businesses, and affordable clothing access for millions of Kenyans.
The Association noted that the proposal strikes a necessary balance between government revenue collection, the protection of millions of livelihoods, and long-term sector stability.
“The mitumba sector remains one of Kenya’s largest informal economic ecosystems, supporting approximately two million Kenyans directly and indirectly. The proposed 5% tax offers a practical and sustainable solution that allows traders to continue operating while contributing fairly to the economy,” she added.
Last week, Treasury Cabinet Secretary John Mbadi announced that the proposals contained in the Finance Bill have been well received by the sector among others.
“They told me that at the moment when they arrive with their Mitumba in containers, they are being taxed, there are so many taxes that are being levied on their Mitumba. That immediately they bring their Mitumba to Gikomba and open their shop, then Kenya Revenue Authority (KRA) staff are all over the place asking them to compute how much profit they have made,” he said.
“So they asked me to come up with a simple tax regime for them, and I put them together with my team at the treasury, and they are the ones who agreed first VAT to be charged only once at the point of entry, so that you do not follow Mitumba all the way to Nakuru, to Kisumu Kibuye market, to Magunga market in Suba, and you start asking how much VAT,” he explained.
As a result, he said VAT will be levied only at the point of entry. “Instead of disturbing these business people, who are small business people anyway, to calculate their profit and to hire accountants to file these returns, why don’t we be simple? At the point of entry, calculate the value of the Mitumba, deem 5% of it as profit and tax that 5%.” he stated.
