MCAK Backs Proposed 5% Presumptive Tax on Mitumba Imports

The Mitumba Consortium Association of Kenya (MCAK) has endorsed the government’s proposed tax framework for second-hand clothing imports, describing it as a fair and practical solution that balances revenue collection with the protection of millions of livelihoods across the country’s vast mitumba value chain.

Under the proposal currently before Parliament, mitumba importers would make a one-time final tax payment at the port of entry. The tax would be calculated based on a presumed profit margin of 5 percent, taxed at the standard corporate rate of 30 percent. MCAK is urging lawmakers to approve the framework without delay, arguing that it offers certainty and transparency for traders while enhancing government revenue collection.

Lifeline for a Key Economic Sector

According to MCAK, the mitumba industry remains one of Kenya’s largest informal economic ecosystems, directly and indirectly supporting approximately two million Kenyans. From importers and wholesalers to market traders, transporters and retailers, the sector plays a critical role in providing employment opportunities and affordable clothing to millions of households.

The association argues that the proposed tax framework strikes a delicate balance between the government’s need to increase tax revenues and the need to safeguard a sector that many Kenyans depend on for their daily livelihoods.

In its statement, MCAK noted that the proposal is significantly more moderate than punitive tariff measures that have occasionally been suggested in policy discussions and which could have devastating consequences for traders, small businesses and consumers. The association warned that excessive taxation could drive up clothing prices, disrupt supply chains and threaten thousands of jobs.

Simplifying Compliance and Ending Uncertainty

A major selling point of the proposed framework, according to MCAK, is its simplicity.

The association says the new structure would replace multiple levies, arbitrary assessments and complex compliance requirements with a single transparent charge payable at the point of importation. This would provide importers with greater certainty regarding their tax obligations and significantly reduce administrative burdens.

MCAK Chairperson Apostle Teresia Njenga said traders have long faced challenges arising from inconsistent assessments and compliance-related disputes.

“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,” she said.

Industry stakeholders believe the proposed framework would create a more predictable operating environment, enabling businesses to focus on growth rather than navigating complex tax processes.

Pathway to Formalisation

Beyond revenue collection, MCAK views the proposal as an important step toward formalising Kenya’s second-hand clothing sector.

The association says integrating the sector into the formal economy would unlock significant opportunities for traders, including easier access to credit facilities, insurance products, business financing and government support programmes. Formalisation could also improve record-keeping, strengthen business sustainability and encourage greater investment across the value chain.

Mitumba and Local Manufacturing Can Coexist

MCAK also pushed back against the notion that support for the mitumba industry comes at the expense of Kenya’s textile and apparel manufacturing sector.

The association maintains that second-hand clothing trade and local textile production are not mutually exclusive. Instead, it argues that a stable and moderate tax framework can support domestic industrial growth while preserving a sector that continues to provide affordable clothing options for millions of Kenyans.

Call for Parliamentary Approval

As debate on the proposal continues, MCAK has reaffirmed its commitment to working with the government, Parliament and industry stakeholders to develop policies that promote economic growth while protecting livelihoods.

The association is now calling on legislators to approve the proposed framework, saying it offers a sustainable path forward for a sector that remains a critical contributor to employment, entrepreneurship and affordable clothing access across Kenya.

For MCAK, the message is clear: a predictable, transparent and reasonable tax regime is not only good for traders but also for the broader economy, ensuring that one of Kenya’s most important informal sectors continues to thrive while making its fair contribution to national development.

Read Also: Kenyan Government Urged To Back The Coexistence Of Mitumba And Local Manufactured Clothes