- The proposed Finance Bill 2026 introduces a 25% excise duty on mobile phones activated in Kenya.
- The tax would affect both imported and locally assembled smartphones.
- A Sh15,000 phone could cost buyers an extra Sh3,750 if the proposal passes.
- Treasury says the move is meant to simplify existing phone-related taxes.
- Critics warn the new tax may increase phone prices and encourage black market sales.
Kenyans planning to buy new smartphones may soon be forced to dig deeper into their pockets if proposals contained in the Finance Bill 2026 are approved by Parliament.
The proposed law introduces a 25 percent excise duty on mobile phones activated on Kenyan networks, a move that could significantly raise the cost of owning a smartphone across the country.
Under the proposal, the tax would apply once a newly purchased phone is connected to a Kenyan SIM card, regardless of whether the device was imported or assembled locally.
If implemented, a smartphone currently retailing at around Sh15,000 could attract an additional Sh3,750 in taxes, while a Sh10,000 handset would cost buyers about Sh2,500 more.
The proposal is expected to heavily affect budget smartphones commonly used by millions of Kenyans for services such as M-Pesa, online business, digital banking, job applications, content creation, and remote work.
Treasury Cabinet Secretary John Mbadi has defended the proposal, arguing that mobile devices are already subject to multiple charges including VAT, Import Declaration Fees, Railway Development Levy, and customs duties.
According to the Treasury, the new excise tax is intended to streamline and consolidate the existing taxation structure into a single framework.
However, economists and technology sector analysts have raised concerns about the possible economic impact of the move.
Some experts warn that higher smartphone prices could slow digital access in Kenya, especially among low-income earners, students, and small business owners who rely on affordable devices for daily economic activities.
Others fear the proposal could revive problems previously witnessed after Kenya increased taxes on phones in earlier years, when consumers reportedly turned to unofficial or smuggled devices to avoid rising costs.
The debate has already generated strong reactions online, with many Kenyans questioning whether the proposed tax could undermine the country’s growing digital economy at a time when smartphones are increasingly becoming essential tools rather than luxury items.
The Finance Bill 2026 is currently before the National Assembly of Kenya for public participation and debate before lawmakers make a final decision.
As discussions continue, attention is now shifting to whether public pressure could influence possible amendments before the bill is passed into law.
