OEMS and other Mobile Technologies companies operating in Kenya urge Kenyan President to reconsider imposing 16% Value Added Tax on mobile phones. This was proposed in a recent VAT Bill by Kenyan Parliament.
The Mobile phone manufacturers Samsung, Huawei, Intel and Nokia together with GSMA, Intel and iHub issued a joint statement showing their disapproval of the bill that in their words would take back the gains achieved in the last few years.
Gains include 7% jump in mobile phone penetration in 6 months of tax waiver in 2009 where the current mobile penetration stands at 75% in Kenya. Kenya has 16.2 million internet users, with 99% accessing internet via mobile broadband.
Kenya has experienced a 25% increase in mobile penetration since the exemption in 2009, and the correlation between growing mobile subscribers and economic growth is well established by the World Bank, McKinsey, GSMA and others. With a global rule of 10% increase in mobile penetration leading to 1.2% growth in GDP, the Mobile manufacturers feel this tax won’t have the desired impact of growing the economy but taking it a step back.