Device Assemblers Propose Exempting Local Smartphone Inputs in Finance Bill 2025 to Lower Prices

Kenyans may start buying locally assembled phones at a cheaper price if the proposals by the  East Africa Devices Assembly Kenya Limited (EADAK) are adopted.

EADAK is pushing for a Value Added Tax (VAT) exemption on imported inputs used in assembling local mobile phones, arguing that the current tax structure could drive prices up.

Speaking during the public hearings on the Finance Bill 2025 on Tuesday, the experts warned that in its current form, the Bill only exempts VAT on locally assembled phones but retains VAT on the raw materials used in the assembly process.

This, according to them, means manufacturers cannot reclaim the VAT paid on inputs, turning it into an unrecoverable expense that will increase production costs and ultimately raise consumer prices.