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Treasury Cabinet Secretary John Mbadi has moved to calm concerns over a proposed 25 per cent tax on smartphones, saying the changes are aimed at streamlining taxes and could even lower the overall cost of phones.
Speaking on Monday during a briefing on the 2026 Finance Bill at the Treasury Buildings, Mbadi said the new plan would replace several existing charges with a single excise duty of 25 per cent.
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According to him, mobile phones are currently subjected to multiple taxes, including Import Declaration Fee, Railway Development Levy, VAT and customs duty, pushing the total tax burden to nearly 55 per cent.
“We are removing all the other taxes and replacing them with one single tax. Phone prices will therefore not increase,” Mbadi said.
He explained that the proposed excise duty would only be charged once a phone is activated for use, rather than when it is imported into the country. This means traders and importers would not pay the tax immediately after stocking devices.
“A phone dealer will only pay the tax once the device is sold and activated,” he added.
The Treasury says the move is intended to improve tax compliance and ensure all phones operating within Kenya are captured in the tax system.
Despite the clarification, the proposal has sparked debate among Kenyans, with fears that smartphone prices may still rise. Mbadi dismissed the claims, accusing critics of relying on misleading information instead of reviewing the actual Finance Bill.
“Please read the genuine Finance Bill and stop spreading fake versions,” he said.
Some analysts estimate that under the proposed structure, a smartphone currently retailing at Sh10,000 could exceed Sh12,500 after factoring in VAT, import costs and dealer mark-ups.
Kenya remains one of Africa’s leading mobile-driven economies, with mobile phones playing a major role in payments, communication and money transfers.
By the close of 2025, the country had 73.2 million active mobile devices, while smartphone penetration had crossed the 80 per cent mark, translating to around 41.4 million smartphones in use.
Over 40 million Kenyans also depend on mobile money services, continuing to fuel demand for smartphones across the country.
