EMMANUEL WEKESA
For weeks, social media, mainstream media, alternative media platforms, and public conversations have been dominated by one question: Is the Finance Bill 2026 introducing a new tax that will make mobile phones more expensive?
Understanding the Mobile Phone Taxation Changes in Finance Bill 2026
The debate has been particularly intense among young people, digital entrepreneurs, online workers, students, and smartphone users, with some commentary suggesting that the proposed 25% excise duty on mobile phones targets digital access, online livelihoods, and youth participation in the digital economy.
Addressing the growing public debate, Cabinet Secretary for the National Treasury and Economic Planning John Mbadi clarified that the proposal does not constitute a new tax but aims to simplify the existing complex taxation framework. Currently, mobile phones attract a combination of taxes including a 25% import duty, 16% VAT, 10% excise duty, 2.5% import declaration fee, and a 2% railway development levy, totaling approximately 55.5% in taxes.
Mbadi explained that under the proposed system, instead of multiple taxes levied at different points during importation and supply chain, a single 25% excise duty would be charged at the point of phone activation using its IMEI. This shift is intended to streamline taxation, making the process clearer and potentially more favorable to traders, who will now pay taxes only upon sale or activation, rather than upfront when importing.
The government believes this approach will reduce the immediate tax burden on traders and consumers, and no additional costs will be imposed on mobile phones beyond the single 25% excise duty at activation. Moreover, the Bill proposes to increase the import threshold for travelers from USD 300 to USD 2,000, allowing more personal items to be imported duty-free. This move aims to ease the import process for passengers bringing gifts or personal belongings from abroad.
