The proposed Finance Bill 2026 has introduced new tax measures targeting the mitumba trade and mobile phone market, sparking debate over their likely impact on prices, traders, and digital access.
The proposals are part of a broader government push to simplify tax collection and seal revenue leakages, particularly in sectors where enforcement has historically been difficult.
Proposed tax on mitumba imports
Under the proposal, imported second-hand clothes would continue attracting 16% VAT at the point of entry.
In addition, government would apply a presumptive income tax model based on an assumed 5% profit margin.
That presumed profit would then attract a 30% one-off income tax, effectively creating a consolidated tax structure paid upfront.
Critics argue the move could increase the cost of second-hand clothes, affecting low-income households that rely heavily on mitumba markets.
There are also concerns over reduced demand, pressure on traders’ cash flow, and possible job losses within the sector.
Another concern is that a flat presumptive model may not accurately reflect the actual profits made by individual traders.
25% excise duty on mobile phones
The bill also proposes a 25% excise duty on mobile phones, a move likely to affect smartphone prices in a market heavily dependent on mobile connectivity.
Concerns raised include the risk of making smartphones less affordable for low-income users and young people, potentially slowing digital inclusion and increasing pressure on household spending.
The government says the tax would be enforced at the point of device activation, allowing authorities to capture all devices entering active use within the tax system.
Officials argue this strengthens compliance and aligns with the broader shift toward a presumptive tax model where obligations are settled upfront instead of through repeated filings.
In a Nutshell …
The proposals reflect the government’s attempt to widen the tax base while simplifying collection mechanisms.
However, they also place politically sensitive sectors – mitumba and mobile access – at the centre of the Finance Bill debate, where affordability and revenue collection are likely to collide.