Assemblers of telecommunication equipment, including mobile phones, laptops, and tablets, will continue to enjoy preferential import tax treatment on inputs used in local manufacturing, following an extension of Kenya’s duty remission scheme.
This comes after the East African Community (EAC) Council of Ministers approved Kenya’s request for an extension of the tax relief, a move expected to accelerate digital connectivity by lowering the cost of devices assembled in the country.
The extended duty remission allows manufacturers to import inputs for assembling telecommunication devices at a zero percent customs duty rate. The programme will now run until the end of June 2026.
“To promote local assembly of telecommunication equipment, Kenya was granted an extension of duty remission on inputs for assembly of telecommunication devices including mobile phones, laptops and tablets,” said Treasury Cabinet Secretary John Mbadi during his 2025 national budget address on Thursday.
EAC’s Common External Tariff imposes duties on goods imported from outside the bloc, which comprises Kenya, Uganda, Tanzania, Rwanda, Burundi, South Sudan, and the Democratic Republic of Congo. The remission, therefore, makes local assembly more cost-competitive.
Analysts view the extension as a significant policy lever to bolster domestic production capacity.
“Remission of duty on such inputs will incentivise the local assembly of mobile phones. This proposal is in line with the objective of the government to promote the local production of mobile phones,” noted legal experts at Bowmans.
However, the potential benefit could be offset by a proposal in the Finance Bill 2025, which seeks to shift locally assembled mobile phones from zero-rated to VAT-exempt status.
While exempt goods are not subject to VAT, the change would prevent businesses from reclaiming input VAT, effectively raising production costs. By contrast, zero-rated goods are also not taxed but still allow VAT recovery on inputs, making them cheaper to produce and potentially more affordable for consumers.
Currently, local phone assembly is central to President William Ruto administration’s push for digital transformation and import substitution. The State has championed public-private partnerships to manufacture affordable smartphones, aiming to expand access and reduce reliance on imports.
Data from the Kenya National Bureau of Statistics (KNBS) shows that imported telecommunications equipment surged 68.1 percent to Sh15.2 billion in the first quarter of 2025, compared to the same period last year. January alone accounted for Sh6.4 billion of the imports, reflecting growing demand as digital adoption deepens across the country.
Telecommunications equipment, as defined by KNBS, includes mobile phones, computers, laptops, networking gear, and accessories such as microphones, digital cameras, and broadcasting tools.
In 2023, the government-backed consortium East Africa Device Assembly Kenya (EADAK) —comprising Safaricom, Jamii Telecom, and China’s Shenzhen TeleOne Technology—began assembling smartphones locally at its Athi River plant. The phones, priced at around $40 (approximately Sh5,170), were touted as among the most affordable on the continent.
EADAK is currently one of only two firms assembling mobile phones in Kenya, alongside asset-financing company M-Kopa.
The latest data from the Communications Authority of Kenya indicates that smartphone adoption continues to surge. As of December 2024, 41.5 million smartphones were in active use—up from 37.4 million in September, marking a 10.9 percent increase in just one quarter.
Demand is projected to rise further as the country continues its shift toward a digital economy, with more services—especially government-related—migrating online.
