By the 254.ke Newsroom
There is no 25% phone tax in Kenya as of November 3, 2026. The Kenya Revenue Authority (KRA) proposed a 25% excise duty on mobile phones, to be paid when a handset is activated on a local network. The National Assembly removed the clause before the Finance Bill 2026 was signed into law on June 23, and the existing 10% excise duty on phones stays in place, according to Techweez. The idea resurfaced this week after KRA’s board chairperson defended it again.
What did KRA propose, and what happened to it?
The Finance Bill 2026 proposed a 25% excise duty on phones for cellular and wireless networks. Treasury Cabinet Secretary John Mbadi explained in May that the new duty would absorb the Import Declaration Fee, the Railway Development Levy, VAT and customs duty. By his account those taxes added up to about 55% and would fall to a single 25%, and he said phone prices would not rise as a result, Kenyans.co.ke reported on May 11.
MPs did not accept that reasoning. The Departmental Committee on Finance and National Planning, chaired by Kuria Kimani, tabled its report on June 16 recommending that the clause be deleted. It cited compliance challenges, delayed revenue collection and uncertainty for consumers, Kenyans.co.ke reported on June 17.
Key facts at a glance
| Date | Development |
|---|---|
| May 11, 2026 | Mbadi defends proposed 25% excise on phones, collected at activation |
| June 16, 2026 | Finance committee report tabled, recommends deleting the clause |
| June 19, 2026 | MPs vote 122 to 40 to drop the 25% phone excise and VAT on person-to-person mobile money transfers, per Capital FM |
| June 23, 2026 | President William Ruto signs the Finance Bill 2026, per Eastleigh Voice |
| November 2, 2026 | Techweez reports KRA board chair Ndiritu Muriithi defending the activation-tax idea |
Why is the phone tax back in the news?
Techweez reported on November 2 that Muriithi defended the activation-based approach at a media engagement in Laikipia. His argument, as the outlet paraphrased it, was that checks at the border are being beaten by under-declaration and by hiding high-value phones inside consolidated cargo. Techweez did not carry a direct quote or a new legal proposal, and nothing in the sources reviewed shows a fresh bill is before Parliament.
KRA has pointed to a recent case. In September, Business Daily reported that investigators found 55,607 basic smartphones in a shipment through Eldoret International Airport where only 3,000 had been declared for tax, plus 309 undeclared high-end phones. The unpaid tax was put at Sh56 million. Techweez noted that one case does not establish the overall scale of phone tax evasion, and that KRA has not published the size of the revenue gap.
Who would have paid the 25%?
Under the proposal, importers and licensed manufacturers would have been liable when a device was activated, not buyers directly. Techweez expected the cost to be passed on in shelf prices anyway. It also noted that the Bill never defined “activation” clearly (switching on, inserting a SIM or first connecting to a local network) and did not say how retailers would prove a phone was tax-paid.
Does the phone tax raise privacy questions?
Any system tying tax to activation would probably depend on device identifiers called IMEI numbers. Techweez noted that the High Court quashed earlier KRA and Communications Authority directives on mandatory IMEI disclosure in 2025. Opponents of the 2026 plan cited cost and inclusion: Capital FM named the Kenya Bankers Association, Safaricom and Airtel Kenya among those who opposed the related tax measures on mobile services.
KRA has since tightened import-stage rules. An October 2026 notice requires importers, customs agents and consolidators to disclose individual importer details and the value of goods in consolidated shipments, Techweez reported. For related coverage, see our reports on the KRA marine cargo insurance rule, the 2027/28 draft budget and PAYE relief in 2026. Official notices are on the KRA website.
FAQ: Kenya phone tax 2026
Is there a 25% tax on phones in Kenya?
No. The proposal was removed from the Finance Bill 2026 before it became the Finance Act 2026 on June 23.
What tax do phones attract now?
Techweez reports the existing 10% excise duty on mobile phones remains unchanged. TechCabal noted in May that smartphones also attract 16% VAT and import declaration fees.
Will KRA try again?
KRA’s board chair has defended the idea publicly, but no new bill or amendment was identified in the sources reviewed for this report. Any change to excise duty would need Parliament’s approval.
Was the M-PESA transfer tax also dropped?
Yes. Capital FM reported that MPs removed the proposed 16% VAT on person-to-person mobile money transfers. Companies providing mobile money services remained subject to the proposed VAT in the revised bill.
