Treasury Cabinet Secretary John Mbadi has clarified that the proposed 5% Value Added Tax (VAT) on second-hand clothes, popularly known as mitumba, is not part of the Finance Bill 2026. However, he expressed support for its inclusion as part of a simplified tax regime for the sector.
Speaking during a special TV47 town hall at the University of Nairobi’s Chandaria Auditorium, Mbadi said, “5% VAT on mitumba goods is not in the finance bill, but I want it there.”
The CS revealed that representatives from the mitumba sector, led by their national chairperson, had visited his office to raise concerns over the numerous taxes imposed on imported second-hand clothes. “They came and complained that at the moment, when they arrive with their mitumba in containers, there are so many taxes being levied on their mitumba,” Mbadi said.
In response to these concerns, Mbadi explained that the Treasury had proposed a simplified tax structure under which VAT on mitumba goods would be charged only once—at the point of entry into the country. Under the proposed system, the VAT would be calculated based on the value of the goods upon arrival, with a 5% profit margin assumed. That profit margin would then be subjected to a 30% tax.
“If they have brought goods worth KSh. 1 million, 5% of it is KSh. 50,000. From that KSh. 50,000, you tax 30%, which is KSh. 15,000. That is what we charge them, and we forget about the mitumba person until they bring another container,” Mbadi explained.
The remarks come amid growing debate over the potential introduction of VAT on mitumba goods, with traders warning that such taxes could hurt their businesses and make second-hand clothing less affordable for millions of Kenyans.
