A drive to widen the tax base has locked hundreds of shops in one of Mercato's oldest cloth markets.
The footsteps, bargaining voices and rustle of cotton cloth that once filled Shematera in Mercato have faded. An informal, receipt-free supply chain now faces the city's push for VAT compliance.
The effort pits weavers and traders against tax authorities seeking to expand the revenue base.
Mitumba traders have proposed a five per cent presumptive tax on imported second-hand clothes during public participation on the Finance Bill 2026.
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The Kenyan government has proposed new tax measures on second-hand clothing and mobile phones as part of the Finance Bill 2026. Treasury Cabinet Secretary John Mbadi tabled the bill in Parliament at the end of April.