Kenya: Mbadi Says Proposed Mobile Phone Tax Reform Aims At Streamlining, Not Raising Burden

Govt of Kenya
The National Treasury building in Nairobi.
25 May 2026
Capital FM (Nairobi)
By Phidel Kizito

NAIROBI, Kenya, May 25-Treasury Cabinet Secretary John Mbadi now says the government has not introduced any new taxes on mobile phones, but is instead proposing a simplification of the current tax regime rather than the creation of a new levy.

According to Mbadi, public debate has largely focused on a proposed 25% excise duty on mobile phones, which has sparked widespread concern across social media and mainstream media platforms, with critics warning it could raise the cost of smartphones and restrict digital access, particularly among young people and small traders.

He, however, emphasized that mobile phones are already subject to multiple taxes and levies along the import and supply chain, including 16% VAT, 10% excise duty, 25% import duty, a 2.5% import declaration fee, and a 2% railway development levy, which cumulatively amount to an estimated 55.5% tax burden.

Follow us on WhatsApp | LinkedIn for the latest headlines

According to the Treasury, the proposed framework would consolidate these charges into a single 25% excise duty collected at the point of activation, replacing the fragmented system currently applied at different stages of importation and distribution.

Mbadi argued that the existing structure creates inefficiencies for traders, who are often required to pay taxes upfront before sales are realized, thereby straining liquidity and increasing costs along the supply chain.

Under the proposed changes, VAT, import duty, the import declaration fee, and the railway development levy would be removed for mobile phones, with the government positioning the reform as a rationalization measure aimed at improving efficiency and transparency in taxation.

"The national nutrition, however, wishes to clarify, that the proposal does not introduce a new tax on mobile phones," he said.

"The proposal was, therefore, primarily, conceived as a tax simplification and rationalization measure, rather than the introduction of a new tax on digital access."

The clarification comes as the Finance Bill 2026 continues to undergo public participation in Parliament amid heightened public scrutiny over proposed tax measures, particularly those affecting digital devices.

The debate has intensified in recent weeks, with sections of the public and industry stakeholders arguing that mobile phones are essential tools for education, financial inclusion, and digital entrepreneurship, and should not face higher taxation pressures.

However, Treasury officials have accused critics of misreporting the proposal, insisting that the intent has been consistently misrepresented as a tax hike rather than a restructuring of the existing tax framework.

The Finance Bill 2026 continues to attract wide national attention as Parliament receives submissions from stakeholders, setting the stage for further debate on Kenya's approach to digital taxation and broader fiscal policy reforms.

Read the original article on Capital FM.

Tagged:
Copyright © 2026 Capital FM. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.

AllAfrica publishes around 600 reports a day from more than 90 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.