Mobile phone prices in Kenya set to go up starting July

Buyers of mobile phones will face higher pricing as a new charge is imposed on the devices as a result of legislative changes that go into effect on Friday.

The Finance Act 2022 imposed a 10% excise charge on cellular phone imports, as well as a Sh50 excise duty on each imported ready-to-use SIM card.

The two new taxes on the purchase and use of mobile phones were not included in Treasury Secretary Ukur Yatani’s initial Finance Bill 2022, but were added during the House’s debate last month.

The SIM card duty was proposed, for example, by Kikuyu member Kimani Ichung’wah in last-minute modifications to the Bill that were approved by the House.

“Excise duty on importation of cellular phones shall be at 10 percent of the excisable value,” reads the Act which President Uhuru Kenyatta signed into law last week.

The new charge will be computed using the cost of mobile phones ordered into the country as well as other taxes and levies.

According to data from Kenya’s Communications Authority, 540,000 new mobile phones were activated in the three months leading up to March 2022.

This increased the number of mobile phones in March to 60.1 million, up from 59.56 million in December of last year.

The tax means that mobile phone users who want to replace or register a new line will have to pay more for the line.

Safaricom, the top operator with 65.88 percent of mobile customers in March, charges Sh50 for SIM replacement and listing. Airtel and Telkom do not charge for new SIM subscriptions.

The two sets of taxes on mobile phone and SIM card purchases add a new layer of taxation to users who already pay a slew of other fees on services they use.