Treasury Cabinet Secretary John Mbadi has moved to calm growing concern over proposed mobile phone taxes in the Finance Bill 2026, insisting the changes are designed to simplify the tax system rather than make smartphones unaffordable for ordinary Kenyans.
The proposal has quickly become one of the most debated sections of the Finance Bill, touching a nerve in a country where mobile phones are no longer viewed as luxury items but everyday tools for work, banking, education and communication.
Speaking during recent public forums, Mbadi said imported phones are currently subjected to several taxes before they even reach shop shelves. These include VAT, customs duty, the Import Declaration Fee and the Railway Development Levy.
According to the Treasury, those combined charges can push the tax burden on some devices beyond 50 per cent.
“We are trying to streamline the process,” Mbadi said during one of the engagements, arguing that the current structure places unnecessary pressure on traders and consumers alike.
Under the proposed changes, the government plans to scrap the multiple charges and introduce a single 25 per cent excise duty. Officials say the levy would only apply once a device is activated on a mobile network, rather than at the point of importation.
Mbadi has argued that the shift could lower upfront costs for phone dealers and help curb tax evasion within the electronics market.
But the announcement has drawn criticism from consumer groups, technology advocates and some Kenyans online, many of whom fear the policy could still drive up the cost of smartphones at a time when the cost of living remains high.
Digital rights campaigners warn that even a modest increase in handset prices could shut out low-income users, particularly students, small business owners and people in rural areas who depend heavily on affordable internet access.
“Phones are now essential services,” one Nairobi-based digital policy analyst said in public commentary surrounding the Bill. “Taxing access to devices risks widening the digital divide.”
The debate comes as the government faces pressure to raise revenue while avoiding the political fallout that followed the 2024 Finance Bill protests, which triggered nationwide demonstrations and forced the withdrawal of several contentious proposals.
Mbadi has repeatedly defended the broader Finance Bill 2026, saying the government’s goal is to widen the tax base and close loopholes instead of introducing what he describes as punitive taxation.
Still, for many Kenyans, the concern is less about how the taxes are structured and more about what they will mean at the checkout counter.
As Parliament prepares to debate the proposals in the coming weeks, the discussion around mobile phone taxes is expected to remain a flashpoint in the wider argument over taxation, affordability and digital access in Kenya.
About the Author
