Nairobi – A proposal in the Finance Bill 2026 to levy a 25 percent excise duty on mobile phones could push smartphones further out of reach for millions of low‑income Kenyans and informal workers who depend on the devices for business, education and access to government services.
The amendment to the Excise Duty Act would apply the tax to any telephone used on a cellular or other wireless network, with the duty payable when the device is first activated rather than at import or point of sale. Treasury officials say the approach is intended to close loopholes and ensure that every active device is captured in the tax system. Critics, however, warn that the timing of the levy could create compliance difficulties over who – telecom operators, importers or distributors – should remit the tax.
If enacted, the cost of a basic smartphone currently priced around Sh10,000 could rise to more than Sh12,500 before adding existing value‑added tax, import duties and dealer margins. The increase comes as the government accelerates digitisation of public services, education, banking and commercial transactions.
The excise duty forms part of a broader revenue‑mobilisation drive in the Finance Bill, which targets an additional Sh120 billion in new tax measures for the 2026/27 fiscal year. Overall tax collections are projected to reach Sh2.985 trillion from July.
For many Kenyans in the informal sector, smartphones have become essential tools of trade. Boda‑boda riders use navigation and ride‑hailing apps, market traders rely on mobile banking and inventory management, and online freelancers need affordable internet‑enabled devices to access digital marketplaces. Mobile penetration and the mobile‑money ecosystem have long been hailed as key drivers of Kenya’s economic growth. Raising smartphone prices could slow internet adoption, undermine financial inclusion and hinder the expansion of e‑government services such as eCitizen, online tax filing and digital payments.
The proposal has also raised concerns among consumers who import refurbished or second‑hand phones. While the Finance Bill includes tax incentives for electric bicycles, buses and other green technologies, the new mobile‑phone levy has been criticised as contradictory to Kenya’s ambition to position itself as a regional technology and innovation hub.
Stakeholders warn that higher device costs risk widening the digital divide, particularly for young people, low‑income earners and households in rural areas. As the bill moves through parliamentary debate, the balance between revenue generation and digital inclusion is likely to remain a focal point for policymakers and the public alike.
