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Kenyan Government Cuts Taxes on Mobile Phone Handsets

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The cost of buying a mobile phone in Kenya has dropped sharply after the government waived the import duty on mobile phones. Kenya's Finance Minister Uhuru Kenyatta cut the 16% VAT on new phone handsets in the government's budget statement along with reducing import duties on a whole range of other products.

"Let not anyone make it seem like it will not be done. It is in our interest to do it, which is why we were lobbying. Nokia and its partners are already implementing this," Nokia East and Southern Africa Communications Manager, Dorothy Ooko told the Daily Nation newspaper. "Gray products will no longer to be brought into our country. The playing field is now level for all. The penetration rate will double and the GDP will grow. It was a win-win for everyone," she added.

However, a 10% tax on airtime vouchers remains in place, so the cost of calls and text messages themselves remain the same price.

The GSM Association has long called for a lowering of taxes on mobile phone handsets and airtime, arguing that the lower costs boosts the user base and hence leads to a net increase in revenue for governments.

A recent report from the GSMA said that mobile subscribers across East Africa are taxed at some of the highest levels world-wide. Kenya, Uganda and Tanzania impose mobile-specific taxes which when added to VAT can result in their respective consumers facing taxes as high as 30% in Uganda and Tanzania, and 27% in Kenya, considerably the highest rates in Africa (and the among the highest across the world as a whole). 

On the web: Daily Nation

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Tags: gsm  tax  gsma  vat  taxes  africa  Kenya