The National Treasury has issued a public clarification on several tax proposals contained in the Finance Bill, 2026, seeking to address what it described as inaccurate media reports and public interpretations surrounding the proposed measures.
In a statement released on Monday, the Treasury welcomed ongoing public participation and stakeholder engagement on fiscal policy matters, noting that debate around the Finance Bill forms an important part of Kenya’s constitutional legislative process.
However, the Treasury said some discussions had incorrectly mixed provisions in the current Bill with proposals contained in earlier finance bills, particularly the withdrawn Finance Bill, 2024.
Mobile Phone Excise Duty Not a New Tax
One of the key issues attracting public attention is the proposed 25 percent excise duty on mobile phones, which some commentators have framed as a tax targeting youth, digital access, and online livelihoods.
The Treasury clarified that the proposal does not introduce a new tax on mobile phones, noting that the devices are already subject to several taxes and levies during importation and distribution.
According to the Treasury, mobile phones currently attract:
16% Value Added Tax (VAT);
10% excise duty;
25% import duty;
2.5% Import Declaration Fee; and
2% Railway Development Levy.
Clarification on Card Payment Fees
The Treasury also addressed concerns regarding taxation of digital payment and card transaction services.
It explained that the Finance Bill, 2026 seeks to clarify the tax treatment of fees charged on digital payment systems, mobile applications, software platforms, and card transaction networks.
According to the Treasury, the rapid growth of digital payment technologies has created uncertainty on whether some technology-driven services should be classified as exempt financial services or taxable commercial services.
The proposed amendments, it said, are intended to ensure consistency in tax treatment and provide legal clarity following recent court decisions involving taxation of card transaction fees and digital payment platforms.
No 5% Withholding Tax on Digital Monetisation
The Treasury further dismissed reports claiming that the Finance Bill, 2026 introduces a 5 percent withholding tax on digital content monetisation.
It stated that no such proposal exists in the current Bill.
Distinction From Finance Bill 2024
The Treasury also clarified that several controversial proposals previously associated with the withdrawn Finance Bill, 2024 are not included in the Finance Bill, 2026.
These include:
VAT on bread; motor vehicle circulation tax;
access to mobile money transaction data; and
the 2024 eco levy proposal on phones.
The clarification comes amid heightened public scrutiny of tax proposals and growing debate over the impact of fiscal measures on households, businesses, and Kenya’s digital economy.
