John Mbadi has submitted the Finance Bill 2026 to Parliament, introducing broad tax changes that target mobile phones, second-hand clothing, and betting activities across Kenya. The proposals are now awaiting parliamentary debate before any amendments or approval.
The bill introduces a significant rise in excise duty on mobile phones and communication devices. Smartphones and related gadgets will now attract a 25 per cent excise duty.
The government will apply the tax at the point of activation instead of importation or purchase, a shift that will likely increase the final cost of devices for consumers and traders in the technology market.
The second-hand clothing sector, commonly known as mitumba, also faces major changes. The bill introduces a deemed profit taxation model where 5 per cent of the customs value of imported worn clothing, footwear, and other used items will be treated as taxable income at the point of importation.
Finance Bill 2026 Introduces Four Taxes
Traders will pay income-based tax on imports rather than relying only on traditional import duties and VAT.
The government argues that this approach will expand the tax base and improve compliance among importers. However, traders in the mitumba industry may face higher operating costs, which could eventually affect retail prices for consumers who depend on affordable second-hand goods.
The betting and gambling sector will also operate under stricter taxation rules. The bill introduces a 20 per cent withholding tax on all winnings. In addition, all funds deposited into betting accounts will now qualify as taxable deposits.
This broadens the tax net and places nearly all gambling-related transactions under government taxation.
The Finance Bill 2026 now moves to Parliament, where legislators will review, debate, and possibly revise the proposals before final approval.
The outcome will determine how deeply the new tax measures affect households, traders, and digital consumers across the country.
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