News29 May 2026 - 19:09

MCAK backs new 5% tax plan for mitumba imports, seeks fast-track approval

MCAK is urging Parliament to approve the proposal.

by STAR REPORTER

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The Mitumba Consortium Association of Kenya (MCAK) has backed a proposed tax framework requiring mitumba importers to make a one-time final tax payment at the port of entry.

The levy is based on a presumed 5 per cent profit margin taxed at 30 per cent.

MCAK is urging Parliament to approve the proposal, describing it as a fair, practical and predictable mechanism that protects livelihoods and supports economic growth and sector formalisation.

The association said the framework replaces multiple levies and arbitrary assessments with a single transparent charge collected at importation. It noted that the simplified system would ease compliance burdens for small traders and improve tax clarity.

MCAK added that the proposal balances revenue collection needs with job protection and the sustainability of a sector central to affordable clothing access in Kenya.

The association emphasised the scale of the sector, noting its role in supporting livelihoods across the country.

"The mitumba sector remains one of Kenya's largest informal economic ecosystems, supporting approximately two million Kenyans directly and indirectly. The proposed 5% tax offers a practical and sustainable solution that allows traders to continue operating while contributing fairly to the economy."

MCAK said the approach avoids punitive alternatives that could disrupt trade and household incomes, stressing the need for a balanced framework.

MCAK also raised concerns over past tax administration practices in the sector.

Apostle Teresia Njenga, Chairperson of MCAK, said: "Mitumba traders have endured significant hardship from arbitrary assessments and extortion by KRA and auditors targeting law-abiding Kenyans. We requested a simplified tax plan from the Treasury precisely to give every importer a clear and honest pathway to pay income taxes."

The association said the framework would improve compliance through a clear entry-point tax system and reduce disputes with tax authorities.

The framework is expected to support formalisation of the sector, enabling access to credit, insurance, financing and government support programmes. MCAK said this would strengthen resilience and sustainability for traders in the value chain.

The association reiterated that mitumba trade and local textile manufacturing can coexist under a balanced policy framework and pledged continued engagement with stakeholders to support economic growth and employment.