John Mbadi has defended the proposed tax on mitumba imports despite its rejection. He said the proposal aimed to simplify taxation for traders.
Speaking on Monday, May 11, Mbadi confirmed that Parliament dropped the proposal from the Finance Bill 2026. The National Assembly reportedly rejected the five percent presumptive tax plan.
Mbadi Still Wants Tax Proposal Returned
Mbadi revealed that he still supports the proposal despite the setback in Parliament. He said he may petition lawmakers to return it through amendments.
According to the Treasury CS, many people misunderstood the proposal from the beginning. He argued that critics demonised the tax before understanding its purpose fully.
Mbadi insisted the plan would actually help mitumba traders reduce tax-related burdens. He explained that the current tax structure remains complicated and costly.
Traders Complained About Current Tax System
The CS revealed that he recently hosted mitumba traders at the National Treasury offices. During the meeting, traders reportedly complained about multiple taxes and compliance costs.
Mbadi said traders currently pay taxes when goods enter the country through customs. They later face additional income taxes and accounting requirements.
According to the CS, many small traders struggle hiring accountants for tax calculations regularly. He argued that the process increases operational costs for traders unnecessarily.
How the Proposed Tax Would Work
Mbadi explained that traders would still pay the standard 16 percent VAT on imports. The government would then charge an additional 1.5 percent income tax.
Treasury officials planned to treat five percent of imported goods’ value as estimated profit. The government would then tax that estimated profit at 30 percent.
Mbadi argued that the arrangement would simplify tax collection for small traders significantly. He claimed traders would no longer face repeated follow-ups from tax authorities.
Treasury Dismisses Price Increase Fears
The Treasury CS dismissed claims that mitumba prices would increase because of the proposal. He maintained that the tax aimed at streamlining compliance instead.
Treasury officials earlier responded to concerns raised by former Law Society of Kenya President Faith Odhiambo. Officials argued that the proposal consolidated several taxes into one predictable structure.
The Treasury also claimed the system would reduce administrative complexity for traders across the sector. Officials insisted the proposal would ease compliance and improve efficiency.
