Mobile taxation in Kenya: Accelerating digital development 2020

Mobile telephone services are playing an increasingly important role in supporting economic growth and social inclusion globally. Growth in mobile penetration can enhance digital connectivity by expanding internet and broadband access, which in turn facilitates the reduction of barriers to trade, commerce, communication, service delivery, and human development. These benefits can be delivered by, for example, expansion in financial inclusion via the use of mobile money, digitally enabled local entrepreneurship, innovative digital health, and education delivery systems and growing numbers of e-government initiatives.

A conducive regulatory environment provides the support the mobile industry needs to thrive and maximise the opportunities available to consumers, business and governments. The tax framework is an important element of this, and there is a need to achieve the right balance between tax revenue maximisation, and incentivising investment and economic growth.

The study reviews the current mobile taxation framework in Kenya, identifies potential areas for reform which would, in turn, improve the overall business environment, and support the delivery of Kenya’s connectivity objectives which include universal broadband coverage. Taking a holistic approach, we consider both the economic and social impact of the mobile sector on Kenya’s economy as well as its financial contribution to the Government.