In a move that could significantly impact consumer prices and the digital economy, National Assembly Finance Committee Chairperson John Mbadi has introduced a proposal in the Finance Bill 2025 to impose a 16% Value Added Tax (VAT) on mobile phones and several other commonly used items.
The proposal, which forms part of broader fiscal reforms aimed at increasing domestic revenue, has already drawn mixed reactions from the public, industry stakeholders, and economic analysts. If passed, mobile phones, previously exempt or taxed at lower rates, will now attract full VAT, leading to higher retail prices and potentially slowing smartphone penetration in the country.
Mbadi defended the move by stating that the government needs to broaden the tax base to support national development goals, reduce reliance on external borrowing, and fund key sectors like healthcare, education, and infrastructure. He emphasized that the VAT adjustments are designed to align with international standards and improve revenue collection efficiency.
In addition to mobile phones, the Finance Bill 2025 lists other goods and services that may be affected, including certain electronics, accessories, and possibly digital services. Industry players warn that the tax could discourage access to affordable technology, especially for low-income populations, and hamper progress in digital inclusion and e-commerce.
Retailers have already signaled that the added tax burden may be passed on to consumers. Some tech firms and advocacy groups are urging Parliament to reconsider or revise the measure, citing concerns about economic inequality, innovation slowdowns, and reduced access to online education and remote work tools.
The Bill is currently under review and will go through public participation and parliamentary debate before any amendments are enacted. Economists predict the final version could face changes depending on the outcome of these discussions.
As the legislative process continues, the public is encouraged to engage and submit views on how the proposed tax reforms will affect their livelihoods and the economy at large.
