Kenyans to pay more for SIM cards & Smartphones starting July 1st

The Kenya Finance Act of 2022 comes into effect tomorrow, July 1st. It will see Kenyans pay more for SIM cards and Smartphones thanks to recommendations added by MPs during deliberations.

According to the act, duty will be charged as follows on the following items:

1. 10% excise duty on importation of cellular phones
2. Imported sim cards to be charged excise duty at KES 50 per card
3. 20% excise duty on fees charged by digital lenders

As of now, Kenya doesn’t have any local producers of cellular phones. While such a law would be put in place to secure local manufacturers, in this case it is only done to raise more money for the government. Factoring in the weak shilling compared to the dollar, plus the extra duty, we can expect significant increase in smartphone prices over the coming months.

The imported SIM cards bit is what’s not clear as of now. Does this affect all SIM cards? Meaning Kenyans will need to pay KES 50 more per SIM card whenever buying a new one or replacing it?

Also, does it cover eSIMs? Which in turn affects phones with the feature as they’re in-built to the phone?

What’s clear is this:

1. The government isn’t keen on improving access to data and smartphones, as should be the case.
2. The government has seen an avenue for increasing its revenue, and gone for it instead of the benefits that would accrue from bettering access.
3. The government doesn’t seem to care that making access of phones and SIM cards expensive, will have a ripple effect on the digital economy of the country.