City lawyer Willis Otieno has sharply criticized Treasury Cabinet Secretary John Mbadi over the proposed taxation model targeting mitumba traders, warning that the move could worsen the cost of living for millions of Kenyans.
Speaking through his social media platforms, Otieno argued that the Finance Bill 2026 unfairly targets ordinary Kenyans who depend on second-hand clothes for affordable living and small-scale business survival. He accused the government of introducing policies that would heavily burden low-income traders and consumers.
According to the proposal defended by Mbadi, mitumba traders would pay a presumptive tax calculated at 5 per cent of the customs value of imported goods, with the payment being made upfront at the point of entry. The Treasury had argued that the system was designed to simplify tax compliance and reduce multiple levies faced by traders.
However, Otieno dismissed the explanation, saying the sector is already struggling with high import duties, transport expenses, and rising fuel costs. He warned that adding more taxes would only push prices higher for ordinary Kenyans who rely on mitumba clothing because locally produced alternatives remain too expensive.
The lawyer also faulted proposals affecting digital payments, arguing that additional VAT charges on mobile money transactions would further increase business costs for traders who depend on electronic transactions to buy and sell goods.
Otieno further claimed that the government’s argument about protecting the local textile industry does not match reality, noting that local production currently supplies only a small portion of the country’s clothing demand.
Meanwhile, Mbadi has continued defending the proposal, insisting that many mitumba traders had requested a simplified taxation system where taxes are paid once during importation to avoid repeated demands from revenue officers.
Although Parliament later dropped the controversial mitumba tax proposal from the Finance Bill 2026, Mbadi has maintained that the idea could still return through future amendments after further consultations with stakeholders.
The debate has now sparked wider public discussion over taxation, the rising cost of living, and whether the government’s revenue measures are hurting small businesses and low-income households more than large corporations.