Kenya is proposing a fresh 25 percent excise duty on mobile phones, a move that could significantly raise the cost of smartphones and potentially slow down one of Africa’s fastest-growing digital economies.
The proposed levy is contained in the country’s Financial Bill 2026, dated May 5, which seeks to impose an excise duty of “25% of the excisable value” on “telephones for cellular networks or for other wireless networks.”
Excise duty is a form of tax typically imposed by governments on specific goods and services, especially products considered either luxury items, high-demand consumer goods, or products capable of generating substantial government revenue. Such taxes are often introduced to boost state earnings, discourage excessive consumption, or regulate specific industries.
If passed, the proposal would add yet another layer of cost to smartphones already burdened with multiple charges before reaching consumers.
Kenya’s 92.9 percent smartphone adoption faces fresh pressure
The proposal comes at a particularly delicate time for Kenya’s rapidly expanding smartphone market, which has emerged as one of the most deeply connected digital ecosystems on the African continent.
- In April, TechMedia Africa reported that smartphone penetration in Kenya surged to 92.9 percent, with nearly 49 million devices active across the East African country’s estimated 53.3 million population.
The figures were contained in the regulator’s “Second Quarter Sector Statistics Report for the Financial Year 2025/2026,” which covered the period between October 1 and December 31, 2025.
The impressive growth has positioned Kenya among Africa’s most smartphone-connected countries, driven largely by cheaper Android devices, expanding internet access, mobile banking services, and a young, digitally active population increasingly dependent on smartphones for work, communication, education, entertainment, and business.
But the proposed excise duty could sharply increase device prices in a market where affordability already remains a sensitive issue for millions of consumers.
- Imported smartphones in Kenya already attract several charges before landing in retail stores, including a 16 percent value-added tax (VAT), import declaration fees, shipping costs, regulatory charges, and other levies. Adding another 25 percent excise duty on top of these could push device prices noticeably higher, especially for entry-level and mid-range smartphones heavily relied upon by ordinary consumers.
For many young Kenyans, even slight increases in smartphone prices can make the difference between entering the digital economy and remaining locked out of it.
High cost of smartphones could impact Kenya’s digital economy
The rising cost of smartphones could also create broader consequences for Kenya’s fast-expanding digital economy, which increasingly depends on widespread mobile connectivity.
With smartphone access now deeply woven into daily life, millions of Kenyans are using mobile devices not just for communication, but as essential tools for work, payments, education, entertainment, and participation in the global digital marketplace.
- According to the International Telecommunication Union, the global digital economy is projected to reach $16.5 trillion by 2028, creating enormous opportunities for digitally connected populations.
- For Kenya’s youthful, tech-savvy population, smartphones have become gateways to remote jobs, freelance work, digital skills training, online businesses, and international marketplaces that allow individuals to earn income far beyond their local communities.
The spread of smartphones is also transforming how people transact financially in Kenya, a country already regarded as one of Africa’s pioneers in mobile money adoption.
The Communications Authority report showed that Kenya’s mobile money market — electronic wallet services that allow users to store, send, and receive money through mobile phones — recorded a subscription growth of 5.6 percent during the review period.
- Reports further estimate that the value of mobile money transactions in February 2025 stood at approximately $4.93 billion, equivalent to KES 790.8 billion.
For small businesses especially, smartphones have evolved into portable commercial hubs — enabling traders to receive payments, advertise products online, manage deliveries, communicate with customers, and participate in Kenya’s increasingly vibrant digital commerce ecosystem.
A sharp increase in smartphone prices, analysts warn, could therefore slow digital inclusion at a time when African economies are racing to deepen internet access and expand participation in global digital trade.
