This archive report was first published on 6 December 2019.
Kenya's tax revenue from mobile airtime has seen a significant surge, with KSh 26.3 billion collected in 2018, a 63% increase from the KSh 16.1 billion collected in 2017.
According to the data, airtime revenue has surpassed the combined revenue from wines, spirits, and cigarettes, despite an additional 5% excise duty implemented in 2018.
As Kenyans spend more time on their phones, the revenue from airtime continues to rise. In a report published in July 2016, it was estimated that Kenyans spent a total of 75 billion minutes on call between July 2016 and June 2018.
This translates to an average of two days spent on the phone per year, with a total of 55.2 billion texts sent during the same period.
While airtime revenue shows an upward trend, former CBK governor Njuguna Ndung'u has expressed concerns that the increasing tax burden may reverse the benefits of financial inclusion achieved through mobile transactions.
“The increasing tax burden on the sub-sector and the consumers, though has raised concerns that the massive gains made in financial inclusion in developing countries made possible by retail electronic payments platform via mobile phone transactions may be reversed, resulting in a return to cash transactions,” Ndung'u warned.
