Nairobi Targets Jua Kali Sector in New Revenue Drive with Informal Trader Tax Plan
NAIROBI — In a bold and potentially contentious move to expand its revenue base, the Nairobi City County Government has announced plans to introduce a structured tax regime targeting the vast informal sector, commonly known as the jua kali economy. Governor Johnson Sakaja’s administration has proposed a new framework aimed at registering and collecting daily or monthly levies from thousands of street vendors, small kiosk operators, and artisanal workshops operating outside the formal tax net. The policy, outlined in a new Finance Bill, seeks to generate billions in additional county revenue while promising to formalize services and infrastructure for the traders in return.
The proposed system involves the creation of a simplified digital registration and payment platform, allowing informal traders to make small, standardized daily fees via mobile money. In exchange, the county pledges to allocate specific, designated trading zones with improved security, sanitation, waste collection, and access to water. The plan also includes a commitment to shield compliant traders from the frequent harassment and arbitrary fees often levied by county enforcement officers, aiming to replace an opaque system of bribes with a transparent, predictable levy. We cannot continue to ignore the largest segment of our urban economy. This is about bringing order, dignity, and mutual obligation, stated a senior county finance official during a stakeholder briefing.
Reaction from the informal sector has been sharply divided. While some trader association leaders acknowledge the potential benefits of formal recognition and guaranteed trading spaces, many grassroots vendors express deep skepticism and fear. We are already paying, but not to the county’s account. We pay ‘to whom it may concern’ every morning just to operate, said Mama Shiro, a vegetable seller in Eastleigh. If the county can truly stop the harassment and give us a secure place to work, maybe it’s a deal. But if this is just another name for the same old harassment with a receipt, it will crush us. Economists warn that the implementation must be sensitive, as excessive levies could raise prices for low-income consumers and push the most vulnerable traders out of business.
The success of this ambitious plan now hinges on a delicate balance of enforcement, trust-building, and service delivery. The county government faces the formidable task of registering a highly mobile and diverse sector, ensuring the digital system is accessible, and—most critically—delivering on its promises of improved amenities and protection. If managed with transparency and empathy, the policy could mark a historic step in integrating Nairobi’s informal economy into the formal fiscal structure, boosting revenue for city services. If mishandled, it risks exacerbating poverty and social tension in a sector that employs millions. The coming months of stakeholder engagement and pilot rollouts will be closely watched as a test of governance and urban economic planning.