Kenya proposes 25% phone tax threatening digital economy growth

Kenya plans to introduce a 25% excise duty on mobile phones, which could significantly raise prices in one of Africa's most connected economies and slow smartphone adoption. The Finance Bill 2026 proposes adding this tax on top of existing charges including 16% VAT, import declaration fees, and other levies that already make entry-level Android devices expensive for many consumers.

This move risks undermining years of efforts by telecom operators and policymakers to move millions of users from basic feature phones to smartphones through buy-now-pay-later models and affordable devices. Kenya currently has 48.7 million registered smartphones compared to 29.6 million feature phones, reflecting the growing importance of internet-enabled devices in banking, payments, and online services.

The higher phone tax could also complicate Kenya's digital ambitions, including online tax filing, AI adoption, and cashless payments that depend on affordable smartphone access. Retailers predict it will increase demand for grey-market imports and refurbished devices while slowing sales through formal channels. "Most of our customers already struggle to afford new smartphones," said Jeff Gichanga, a Kenyan phone retailer. "Any additional tax will push more people toward second-hand phones or devices brought in through unofficial channels."

What will this new tax mean for your digital service access and smartphone budget? Will you switch to refurbished devices or reduce your mobile spending?

SOURCE: https://techcabal.com/2026/05/13/kenyas-proposed-phone-tax-could-raise-smartphone-prices-sharply/