How Finance Bill 2026 Taxes on Mitumba and Mobile Phones Will Affect You

Kenya’s draft Finance Bill 2026 proposes new taxes on second-hand clothing and mobile phones, setting out changes that could affect import costs and consumer prices.

The Bill, presented to Parliament by National Treasury Cabinet Secretary John Mbadi, introduces a presumptive tax on used clothing, footwear, and related goods under tariff heading 6309. Importers would pay a five per cent levy based on the value of goods before they are released at ports or border points. 

This tax would replace multiple existing charges, including certain duties and VAT obligations, and would serve as a final payment. Mr Mbadi stated that the proposal is intended to simplify tax compliance and reduce disputes between traders and the Kenya Revenue Authority. 

He said the approach followed consultations with mitumba traders, who requested a single tax applied at the point of entry instead of several separate requirements.

The Bill also proposes an increase in excise duty on mobile phones and communication devices. 

Under the plan, smartphones and similar gadgets would attract a 25 per cent tax, applied at the point of activation rather than importation. Treasury officials say this system would improve tax collection by ensuring all devices in use are captured.

Traders have raised concerns about the likely impact on prices. Mitumba dealers estimate that a five per cent increase in import costs could lead to retail price rises of between 15 and 20 percent. They warn this could reduce affordability for consumers who depend on second-hand goods.

The government has described the measures as part of efforts to increase domestic revenue and support the local textile industry by reducing the competitiveness of imports. The proposals come at a time when many households are already facing pressure from rising living costs.

If approved by the National Assembly, the measures will take effect in July as part of the Sh4.8 trillion budget for the 2026/27 financial year.