The proposed 25% excise duty on mobile phones does not introduce a new tax - Mbadi

Added: 2026-05-26

[00:00:00]So, let me now address some of the issues that have not been accurately reported on. And when I finish, you can raise questions.

[00:00:12]Number one is the 25% excise duty on mobile phones.

[00:00:17]25% excise duty on mobile phones. I want to address this issue because it keeps on recurring and coming back.

[00:00:26]In the debate in the social media, means not alternative media, every media has been mentioning this. So, this is my response.

[00:00:36]Public discussion has particularly focused on the proposed 25% excise duty on mobile phones, with some commentary framing the proposal as taxation targeting the youth, digital access, and online livelihoods.

[00:00:52]The National Treasury, however, wishes to clarify that the proposal does not introduce a new tax on mobile phones.

[00:01:00]Mobile phones are currently subject to multiple domestic taxes and levies during their importation and along the supply chain, which include the following. There is 16% VAT on all mobile phones.

[00:01:18]There is 10% excise duty as we speak.

[00:01:22]So, excise duty is not new. There is already 10%.

[00:01:27]There is 25% import duty on mobile phones.

[00:01:31]There is 2.5% import declaration fee.

[00:01:34]And finally, there is 2% of railway development levy.

[00:01:41]These taxes and levies cumulatively create an aggregate tax burden of approximately 55.5% within the current mobile phone taxation framework.

[00:01:56]55.5% On the contrary, the proposal under the Finance Bill 2026 seeks to simplify. So, simplicity that I talked about seeks to simplify the existing structure by replacing the current fragmented framework with a single 25% excise duty collected upon activation of the phone. And I have explained this that at the moment when the phone arrives arrives at the point of entry, all these levies and taxes are charged.

[00:02:36]The customs duty 25% excise duty 10%.

[00:02:41]There is VAT at the point of landing here, 16%.

[00:02:47]There is import declaration fee of 2.5% and there is 52% of railway development levy.

[00:02:56]All that is tax is charged when the phone arrives.

[00:03:01]Now, immediately the phone leaves the port of entry, there are other taxes because it is followed along the supply chain until it reaches the consumer or the customer.

[00:03:15]VAT will be charged at every single step.

[00:03:19]And you see the danger with that and we have explained is that phones that are brought and put in the store which have not been sold, the person the vendor has already paid taxes reducing their liquidity.

[00:03:33]We are saying we are replacing that all that complicated system with a simple one where you bring the phone, there is no charge tax, there is no charges, there's no levy, but the time the phone is bought and is being activated is when you pay one single tax that is excise duty at 25%.

[00:03:56]Tell me how that makes phones more expensive than the current arrangement.

[00:04:01]So, if enacted, mobile phones will no longer be subject to 16% VAT, 2.5% import declaration fee, and 2% railway development levy under the proposed framework. The 25% import duty will also be removed upon implementation of the new tax regime, thereby simplifying the tax structure and lowering the overall domestic tax burden applicable to mobile phones.

[00:04:28]The proposal was therefore primarily conceived as a tax simplification and rationalization measure, rather than the introduction of a new tax on digital access. The National Treasury recognizes that mobile phones increasingly serve as essential tools for communication, education, finance financial access, online businesses, digital work, and youth economic participation, which explains the heightened public interest surrounding the proposal. So, I want to stop there on mobile phones. That is a clarification we can give.

[00:05:04]It is so clear. It is so flowing. It is so simple. I don't know why this issue must always be debated when we have provided clarity. Why one would want us to have multiple taxes all over the place for mobile phones and cause people who are trading in mobile phones to pay taxes for phones they have not even sold. When we are saying, "Please allow us to only collect one tax at the time the phone is sold and is ready for use."