Farmers, mitumba traders among key winners in proposed budget plan

‎Treasury CS John Mbadi reads 2026 Budget at Parliament buildings, Nairobi. June 11th,2026. [Elvis Ogina, Standard]

Farmers, mitumba traders, and patients undergoing dialysis are among the groups set to benefit from new spending and tax measures proposed by Treasury Cabinet Secretary John Mbadi in the 2026/27 Budget. 

The proposals include billions of shillings for agricultural productivity and climate resilience programmes, VAT exemptions aimed at lowering the cost of essential goods and services, and higher taxes on sugary drinks and tobacco products as part of public health interventions.

 Agriculture
The government, through the National Treasury, has proposed a Sh64 billion allocation to the agriculture sector to boost productivity, value addition and resilience.

Key investments include Sh18 billion for the Fertiliser Subsidy Programme, Sh2 billion for the Seed Subsidy Programme and Sh1 billion for the Coffee Seedlings Programme, aimed at lowering input costs for smallholder farmers.

Additionally, Sh4.7 billion has been allocated to the National Agricultural Value Chain Development Project to enhance processing and strengthen market linkages.

To improve food security and climate resilience, the Treasury has proposed Sh5.4 billion for the Food Systems Resilience Project and Sh1.6 billion for the Resilience for Food and Nutrition Security Programme. The funding is intended to support adaptive livelihoods, diversify income sources and reduce vulnerability to climate-related shocks.

Mbadi has also proposed Sh8.2 billion for the Blue Economy and Fisheries sub-sector, including Sh2.1 billion for the Aquaculture Business Development Project, Sh1.8 billion for the Kenya Marine Fisheries and Socio-Economic Development Project, and Sh578 million for the Kabonyo Fisheries and Aquaculture Training Centre. The allocations are aimed at expanding sustainable aquaculture and strengthening the fisheries sector.

Trade
In the trade sector, the Treasury has proposed several tax measures, including VAT exemptions on selected goods.

Among the products set to benefit are kidney dialyzers, a critical component used in the treatment of patients with kidney failure. According to Mbadi, removing VAT on the product is expected to lower the cost of dialysis.

The Treasury has also proposed exempting domestic sales of second-hand clothing and footwear, commonly known as mitumba, from VAT.

Mbadi said the move recognises the important role the sector plays in supporting livelihoods and providing affordable clothing to millions of Kenyans.

"To simplify compliance, the Bill proposes to charge VAT at the point of importation, while subsequent domestic sales of worn clothing and worn footwear will be exempt from VAT. This means that mitumba traders selling to everyday Kenyans will not be burdened with VAT obligations," said Mbadi.

The Treasury has further proposed the introduction of a 1.5 per cent withholding tax on income earned from the sale of scrap metal.

In a move aimed at discouraging excessive sugar consumption, the Finance Bill proposes increasing excise duty on sugar-sweetened beverages from Sh14.14 per litre to Sh20 per litre.

Mbadi has also proposed increasing excise duty on manufactured tobacco, tobacco substitutes, tobacco extracts, and essences from Sh11,382.48 per kilogramme to Sh12,550 per kilogramme. Excise duty on cigars, cheroots, and cigarillos containing tobacco or tobacco substitutes would rise from Sh16,260.29 per kilogramme to Sh18,000 per kilogramme.