Treasury Denies New Tax on Mobile Phones in Finance Bill 2026 Debate

The National Treasury has moved to calm rising public concern over proposed changes in the Finance Bill 2026 that critics say could make mobile phones even more expensive, insisting there is no new standalone tax being introduced on the devices.

National Treasury Cabinet Secretary John Mbadi said the debate around the proposed 25 per cent excise duty on mobile phones has been misunderstood and misrepresented in public discussions, especially online.

He noted that the conversation has largely been framed as though the government is directly targeting young people and digital livelihoods.

Speaking during a press briefing on Monday, Mbadi maintained that mobile phones are already subject to multiple taxes at the point of importation and throughout the supply chain, long before they reach consumers. According to him, what is being discussed in the Finance Bill is part of a broader tax structure review rather than a fresh burden introduced in isolation.

He pointed out that imported smartphones already attract several levies, including 16 per cent VAT, 10 per cent excise duty, 25 per cent import duty, a 2.5 per cent import declaration fee and a 2 per cent railway development levy. These charges, he argued, accumulate significantly and contribute to the final retail price of devices in the local market.

“The discussion has been centred on the proposed 25 per cent excise duty on mobile phones, with claims that it is aimed at restricting access for young people and digital users,” Mbadi said, adding that this interpretation was not accurate. He emphasised that the policy should be understood within the wider import taxation framework.

The remarks come at a time when the Finance Bill 2026 is attracting sharp public scrutiny, with a significant portion of criticism coming from young Kenyans who rely heavily on smartphones for work and income generation.

Digital creators, freelancers, online vendors and gig economy workers have all expressed concern that any increase in device costs could further strain already limited earnings.

For many of these users, mobile phones are not just communication tools but essential work equipment used for content creation, online marketing, mobile banking and remote employment opportunities. Many argue that increasing taxes on such devices risks slowing down Kenya’s rapidly growing digital economy and widening inequality in access to technology.

However, the Treasury maintains that the proposed measures are aimed at improving revenue collection efficiency and aligning import taxation across different product categories.

The controversy has also drawn attention from policy analysts and digital rights advocates, who warn that the affordability of smartphones remains a key driver of digital inclusion in Kenya. They argue that any policy that raises the cost of access could have long-term effects on innovation, employment and connectivity.