Telcos push for tax scrap for phones below Sh13,000

Mobile network operators are pushing for removal of taxes on entry-level smartphones, arguing that high handset costs have become the biggest obstacle to bringing millions of people online.

The GSM Association (GSMA), a global industry organisation representing the interests of telcos worldwide, wants African governments to remove taxes on smartphones priced below $100 (Sh12,900).

The industry body says many countries continue to classify smartphones as luxury goods for customs purposes, pushing up prices for devices that are increasingly viewed as essential tools for education, financial services, healthcare and access to government services.

The GSMA says 63 percent of Africans remain offline despite mobile broadband networks covering most of the population, with affordability as the main barrier to internet adoption.

“The GSMA Handset Affordability Coalition has called on African governments to remove taxes on entry-level devices priced below $100, citing South Africa's April 2025 reform as the replicable model,” the GSMA’s Mobile Economy Africa 2026 report says.

“Taxes on entry-level smartphones… directly raise the price floor for first-time device purchasers, disproportionately affecting the lowest-income segments of the population, who most need affordable devices to access digital services.”

The GSMA brings together mobile operators, device manufacturers and international organisations, including the World Bank and the International Telecommunication Union (ITU).

The push comes as Kenya has stepped back from plans that would have significantly lowered taxes on imported smartphones.

The National Treasury recently retained the 25 percent East African Community customs duty on imported handsets even as it proposed removing other charges, including the 16 percent value-added tax, the 2.5 percent import declaration fee and the two percent railway development levy.

Had all the taxes been removed except the newly increased excise duty of 25 percent, the overall tax burden on imported smartphones would have fallen from about 55.5 percent to 25 percent, lowering retail prices.

But Treasury Cabinet Secretary John Mbadi last week announced that Kenya would instead seek an exemption on imported inputs used in the local assembly of smartphones, a move aimed at supporting domestic manufacturers.

Still, Kenya cannot unilaterally abolish the customs duty because it is set under the East African Community (EAC) common external tariff framework and would require approval from the regional bloc.