Renowned City Lawyer Willis Otieno has criticised the proposed taxation measures on second-hand clothes (mitumba), warning that the new levies will worsen the cost of living for ordinary Kenyans.

In a statement on his X account on May 9, 2026, Otieno argued that the government is subjecting the mitumba sector to a compounding tax effect by introducing additional charges and removing exemptions on digital payment transactions used by traders.

According to him, mitumba traders are already grappling with high import duties charged per kilogram, and the introduction of a new five per cent levy paid upfront will pile more pressure on the business.

“Mitumba is already hit with high costs. By adding new levies and removing exemptions on the digital payments used to buy them, the government is creating a compounding tax effect,” Otieno stated.

Rise in logistics expenses

According to Otieno, the rising fuel and transport costs linked to provisions in the Finance Bill will increase logistics expenses, while the proposed VAT on mobile money transactions will make payments to suppliers more costly.

Otieno dismissed the government’s justification that the taxes are meant to protect the local textile industry, including companies such as Rivatex, arguing that local production is still too low to meet the country’s demand for clothing.

He claimed that Kenya’s local textile industry currently supplies less than 10 per cent of the national demand, making mitumba the only affordable option for millions of low-income households.

“Fuel and transport costs are rising due to other parts of the Bill. As you noted, the new VAT on mobile money makes every payment to a supplier more expensive. The government often justifies these taxes by claiming they are “protecting the local textile industry” (like Rivatex). Local textile production currently meets less than 10 per cent of national demand,” Otieno said.

Otieno added that the new taxes would instead raise the price of a second-hand suit from around Ksh500 to nearly Ksh800, while locally-made alternatives remain beyond the reach of many Kenyans.

Proposed Mitumba bill

The draft law, presented by National Treasury Cabinet Secretary John Mbadi, introduces new taxes targeting mitumba imports and communication devices as the government seeks to raise revenue for the Ksh4.8 trillion 2026/27 budget.

The proposed measures are expected to take effect in July 2026 if lawmakers pass the Bill.

One of the biggest proposals in the Finance Bill 2026 is the introduction of a presumptive tax on imported second-hand goods, including clothes, shoes and other used household items classified under tariff heading 6309.

Under the proposal, importers will pay a five per cent tax based on the value of goods at the point of importation before consignments are released from ports or border points.

The Bill introduces Section 12H into the Income Tax Act, making the tax mandatory for traders dealing in used goods.

“Notwithstanding any other provision of this Act, tax shall be payable by any person in respect of income derived from the importation into Kenya of used clothing, used footwear, and other used goods classified under tariff heading 6309,” the Bill states.