{"id":16779,"date":"2020-03-24T08:00:06","date_gmt":"2020-03-24T08:00:06","guid":{"rendered":"https:\/\/www.gsma.com\/newsroom\/?p=16779"},"modified":"2024-11-11T16:13:42","modified_gmt":"2024-11-11T16:13:42","slug":"reform-policy-to-boost-kenyas-mobile-connectivity-says-gsma","status":"publish","type":"post","link":"https:\/\/www.gsma.com\/newsroom\/press-release\/reform-policy-to-boost-kenyas-mobile-connectivity-says-gsma\/","title":{"rendered":"Reform Policy to Boost Kenya\u2019s Mobile Connectivity Says GSMA"},"content":{"rendered":"<p style=\"text-align: center;\"><em>48 Per Cent of the Population of Kenya Remains Unconnected to Mobile Networks \u00a0<\/em><\/p>\n<p><strong>Nairobi:<\/strong> Kenya is making excellent progress to achieve its target of universal broadband coverage by 2030 and there is an opportunity for the government to accelerate the country\u2019s digital transformation with more supportive policies. This was the key finding of a report released today by the GSMA, which highlights potential areas for policy reform that would support achievement of Kenya\u2019s Digital Economy Blueprint, and broadband coverage goals.<\/p>\n<p>The mobile market in Kenya has expanded rapidly over the last decade, with the percentage of Kenyans connected to mobile services increasing from 30 per cent in 2009 to 52 per cent in 2019. According to GSMA Intelligence this number has the potential to grow to 58 per cent by 2025.<\/p>\n<p>In order to achieve this, the GSMA report urges Kenya\u2019s government to follow best practice tax principles, simplify infrastructure deployment fees, and permit the tax deductibility of government payments. These, amongst other more supportive policies, would provide greater certainty for operators to invest in mobile networks and increase mobile penetration.<\/p>\n<p>\u201cMaintaining a more stable tax system is necessary to unlock the full value of mobile connectivity for the 48 per cent of people currently unconnected in Kenya,\u201d said Akinwale Goodluck, Head of Sub-Saharan Africa, GSMA. \u201cWith growing mobile penetration, Kenyans stand to benefit from improved financial inclusion, digitally-enabled local entrepreneurship, innovative health and education systems, and growing numbers of e-government initiatives. By improving the business environment for mobile operators, all Kenyans could benefit from these economic and social benefits of mobile connectivity.\u201d<\/p>\n<p>The key findings from the report, \u2018Mobile Taxation in Kenya: Accelerating Digital Development\u2019, are highlighted below:<\/p>\n<p><strong>More supportive policies are key to securing Kenya\u2019s digital leadership <\/strong><br \/>\nThe tax contribution of the mobile sector in Kenya is high compared to other countries in Sub-Saharan Africa (SSA), which risks limiting the growth potential of the country\u2019s mobile sector. In 2018, the total tax contribution of the mobile sector was estimated at KES 97 billion ($954 million), representing 37 per cent of the total market revenue. This was above the average in SSA (26 per cent) and any other reviewed region, including Europe (21 per cent) and Latin America (18 per cent).<\/p>\n<p>Further, the Kenyan mobile sector makes a large contribution in taxes and fees relative to its economic footprint; while the mobile market revenue accounted for 3 per cent of Kenya\u2019s GDP, the sector\u2019s tax and fee payments accounted for around 6.5 per cent of government total tax revenue. The tax contribution of the mobile sector is therefore 2.2 times its size in the economy. This is limiting mobile operator\u2019s ability to make the necessary investments in Kenya\u2019s mobile networks and improve the affordability of mobile services.<\/p>\n<p><strong>Improving the affordability of mobile services could boost economic growth \u00a0<\/strong><br \/>\nMobile technology plays an important role in Kenya\u2019s economic growth and for this to continue, significant investment in mobile networks, and addressing barriers to adoption, such as affordability, is required. In Kenya, affordability is hampered by excise taxes, which increase the cost of using mobile services.<\/p>\n<p>Mobile operators in Kenya make a significant and valuable contribution to the economy and society. Total mobile sector revenues were KES 264 billion in 2018 ($2.6 billion), generating KES 133 billion ($1.3 billion) of direct economic value. This economic value constitutes over 1.5 per cent of Kenya\u2019s gross domestic product (GDP). There is potential for the mobile sector to make a far greater economic and social contribution by increasing mobile connectivity, so everyone can participate in the country\u2019s digital economy.<\/p>\n<p><strong>An uncertain tax environment could have detrimental impacts on the wider economy<\/strong><br \/>\nThe GSMA report argues that a short-term focus on the ICT sector for tax revenue could jeopardise the long term economic and social benefits of digital inclusion.<\/p>\n<p>To illustrate this, the report analyses the potential detrimental effects of a hypothetical increase in the excise duty on mobile services from 15 per cent to 18 per cent. The study highlights that such a tax increase would potentially decrease Kenya\u2019s GDP by $268m and reduce potential mobile subscribers by 950,000.<\/p>\n<p>\u201cKenya is considered a front runner in digital transformation in the region. To maintain this position, the government must strike the right balance between tax revenue maximisation, and incentivising investment and economic growth,\u201d added Akinwale Goodluck.<\/p>\n<p>The report, \u2018Mobile Taxation in Kenya: Accelerating Digital Development\u2019, is available at <u><a href=\"https:\/\/www.gsma.com\/solutions-and-impact\/connectivity-for-good\/public-policy\/gsma_resources\/mobile-taxation-in-kenya-accelerating-digital-development\/\" target=\"_blank\" rel=\"noopener noreferrer\">www.gsma.com\/mobile-taxation-in-kenya<\/a><\/u><\/p>\n<p style=\"text-align: center;\">-ENDS-<\/p>\n<p><strong>About the GSMA<\/strong><br \/>\nThe GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators and nearly 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces the industry-leading MWC events held annually in Barcelona, Los Angeles and Shanghai, as well as the Mobile 360 Series of regional conferences.<\/p>\n<p>For more information, please visit the GSMA corporate website at <a href=\"https:\/\/www.gsma.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">www.gsma.com<\/a>. Follow the GSMA on Twitter: <a href=\"https:\/\/twitter.com\/gsma\" target=\"_blank\" rel=\"noopener noreferrer\">@GSMA<\/a>.<\/p>\n<p><strong>Media Contacts: <\/strong><br \/>\nFor the GSMA<\/p>\n<p>GSMA Press Office<br \/>\n<a href=\"mailto:pressoffice@gsma.com\">pressoffice@gsma.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>48 Per Cent of the Population of Kenya Remains Unconnected to Mobile Networks \u00a0 Nairobi: Kenya is making excellent progress to achieve its target of universal broadband coverage by 2030 and there is an opportunity for the government to accelerate the country\u2019s digital transformation with more supportive policies. This was the key finding of a [&hellip;]<\/p>\n","protected":false},"author":3,"featured_media":16780,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_jetpack_memberships_contains_paid_content":false,"jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[3],"tags":[],"algolia_discover_state":[6602],"algolia_discover_topic":[],"algolia_discover_region":[],"algolia_discover_type":[6627],"algolia_discover_series":[],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.0 (Yoast SEO v22.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Reform Policy to Boost Kenya\u2019s Mobile Connectivity Says GSMA - Newsroom<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.gsma.com\/newsroom\/press-release\/reform-policy-to-boost-kenyas-mobile-connectivity-says-gsma\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Reform Policy to Boost Kenya\u2019s Mobile Connectivity Says GSMA\" \/>\n<meta property=\"og:description\" content=\"48 Per Cent of the Population of Kenya Remains Unconnected to Mobile Networks \u00a0 Nairobi: Kenya is making excellent progress to achieve its target of universal broadband coverage by 2030 and there is an opportunity for the government to accelerate the country\u2019s digital transformation with more supportive policies. 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