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Mobile telephony and taxation in Kenya

Since the Kenyan government’s abolition of the VAT on handset sales, mobile penetration has increased from 50 per cent to 70 per cent. The mobile industry is a significant contributor to Kenya’s economy, contributing more than KES 400 billion annually, and employing almost 250,000. This case study explores how Kenya’s abolished mobile handset taxes have made mobile services more affordable for the wider population, boosting the Kenyan economy. The report shows that mobile operators will contribute 33 per cent more in tax this year than they did prior to the handset tax slash and will contribute around 8 per cent of Kenya’s GDP in 2011.

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