Kenyans have been spared higher costs on mobile money transactions and mobile phones after Parliament rejected proposals to introduce a 16 percent Value Added Tax (VAT) on peer-to-peer money transfers and a 25 percent tax on mobile phones.
Under amendments to the Finance Bill 2026 approved by the National Assembly, lawmakers rejected the proposal to impose VAT on person-to-person mobile money transfers, citing concerns that it would increase the cost of sending money and undermine financial inclusion.
Industry players, including the Kenya Bankers Association, Safaricom and Airtel Kenya, had opposed the proposal, warning that it would discourage the use of digital financial services.
However, companies that provide mobile money services will still be subject to the proposed 16 percent VAT under the revised bill.
Lawmakers also dropped a proposal to impose a 25 percent tax on mobile phones, a move that would have significantly increased the cost of purchasing smartphones.
The decision comes as the government seeks to promote digital access and connectivity across the country. Recent industry data shows smartphone penetration in Kenya has reached 92.9 percent.
The Finance Bill 2026 now awaits presidential assent by President William Ruto before it becomes law.
A total of 122 MPs voted in support of the bill, while 40 opposed it. No lawmaker abstained from voting.
