Mbadi Addresses Concerns Over Phone Prices in Finance Bill 2026

National Treasury Cabinet Secretary (CS) John Mbadi has recommended scrapping all phone taxes and instead introducing a 25 percent excise duty tax in comprehensive proposed changes in the Finance Bill 2026.

The excess tax on phones, Mbadi said, is currently at 10 percent, but this will be increased as a move to restructure taxes and generate additional income.

Mbadi clarified that the government is proposing to shift the point of taxation of phones from the port of entry to when a customer will be using his/her phone.

“But now the point of leaving the tax is shifted from the point of entry to when you are activating your phone,” he said.

Mbadi explained that this move will do away with too many levies that currently make phones so costly and make tax collection much simpler.

“It is being reported that phones will be more expensive, far from it, the phones will be cheaper,” Mbadi said.

He explained that presently, Kenyans pay up to 55% to import mobile phones, but the proposal will collapse all the taxes into one and cap it 25%.

“We are saying, we collapse all these taxes into one, which is excise duty, which is currently at 10%, we make it to 25%, and do away with all other taxes on phones,” Mbadi explained.

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Mbadi on Income Tax Proposals

Regarding financial services, the CS clarified that the proposal of taxing income derived by firms providing cards to banks will not affect the ordinary card users.

“This is not a tax that is going to be levied on consumers of financial services that are being offered by cards. Far from it,” Mbadi said.

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He further argued that financial institutions outsource the provision of services and they hire experts to come up with different designs of cards and later supply them to financial institutions, and income derived from that business is not captured.

“The financial institutions engage some professionals who come up with cards and sell to them. And when they sell to them, the current arrangement, there is no provision on how to tax those people who make income out of selling,” he said.

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Mobile Phones at a shop in Nairobi. Treasury CS John Mbadi Wants excise duty on phones raised to 25%PHOTO/ Business List.