The proposed tax on second-hand clothing imports has been dropped from the Finance Bill 2026.

On 11th May 2026, Treasury Cabinet Secretary John Mbadi confirmed that the National Assembly removed the mitumba tax provision from the final version of the Bill that was transmitted to Parliament for consideration.

"On the taxation around mitumba, I have noticed that it has been dropped out of the final Bill that has come from the National Assembly," Mbadi said at a press conference. "Of course, the final Bill comes from there. Our proposal was to have it, and I still insist that we should."

That last sentence is the one traders need to pay attention to.

What was dropped

The Finance Bill 2026, as originally published in the Kenya Gazette on 5th May, included a new Section 12H of the Income Tax Act. That section would have imposed a deemed profit tax on all imported worn clothing, worn footwear, and other second-hand articles classified under tariff heading 6309.

Under the proposal, KRA would have assumed a five per cent profit margin on the customs value of imported mitumba goods and applied a 30 per cent income tax rate to that assumed profit. The effective charge worked out to about 1.5 per cent of customs value, payable at the port before goods were released.

That entire provision is no longer in the Bill that Parliament is currently considering.

Why it was cut

The National Assembly has not issued a formal statement explaining the removal. But the political context is not hard to read.

The Finance Bill 2024 was withdrawn after Gen Z-led protests left at least 65 people dead, forced President Ruto to reject the Bill, and led to the dissolution of his Cabinet. The protests were triggered by tax proposals that directly affected the cost of living for ordinary Kenyans.

A tax on mitumba, which is the primary source of affordable clothing for millions of low-income households, fits precisely into the category of measures that provoked the 2024 crisis. With a general election approaching in 2027 and public sensitivity to new taxes at a historic high, the political calculation for Parliament is straightforward: this is not a fight worth having right now.

But Mbadi is not letting it go

Despite Parliament's decision, the Treasury is not treating the mitumba tax as dead. Mbadi made clear that the government still considers the proposal viable and intends to bring it back as an amendment during the parliamentary process.

"Even though it is not in the final Bill, we still believe it is an amendment that should be carried by Parliament," he said.

This matters because amendments can be introduced during committee stage or even during the plenary debate on the Bill. A provision that has been removed from the published version can be reinserted by an MP or by the government through a committee recommendation.

In other words, the mitumba tax is not law, and it is not in the current Bill, but it is not gone either. It is sitting in the Treasury's back pocket.

What traders should do

If you import mitumba, the immediate pressure is off. The tax is not in the Bill. You do not need to budget for it at the port. Business continues as normal for now.

But the public participation process is your opportunity to make your position heard. If you support the current system or if you have specific concerns about the deemed profit model, submit them to Parliament before 25th May 2026. Written memoranda can be sent to the Departmental Committee on Finance and National Planning through the Clerk of the National Assembly.

If enough traders, consumer groups, and business associations push back during public participation, the amendment route becomes politically harder for the Treasury to pursue.

If they stay silent, the provision could reappear during committee stage and pass with little debate.

The next few weeks will determine whether this tax is truly dead or simply on pause.