The Kenya Association of Manufacturers (KAM) has warned that proposed VAT changes in the Finance Bill 2026, currently before Parliament, could increase the cost of mobile phones, electric motorcycles, and other digital devices, according to a report by Dawan Africa.

KAM Chief Executive Officer Tobias Alando said the proposed VAT measures would raise the cost of essential technologies critical to Kenya's economic transformation agenda. The association argued that smartphones are no longer luxury items but essential tools enabling mobile banking, digital marketplaces, government services, and employment access for millions of Kenyans, Dawan Africa reported.

KAM also flagged risks to Kenya's growing electric mobility sector. Electric motorcycles have become a popular alternative for boda boda operators looking to cut fuel costs, but higher taxes could make the vehicles less affordable and slow adoption, according to the report. Alando was quoted as saying tax policy should continue supporting, rather than discouraging, investment in e-mobility.

The warning comes amid wider public debate over the Finance Bill 2026, with stakeholders raising concerns about provisions affecting digital transactions, telecommunications services, rental income, and consumer goods, Dawan Africa noted. The outlet cited analysts framing the dispute as reflecting tension between the government's need to raise revenue and the risk of raising costs on goods already strained by rising operating expenses.

According to the report, KAM is calling on lawmakers to reconsider the VAT proposals before the bill is finalized, arguing that preserving affordability for technology and clean energy products would better support economic growth, innovation, and job creation. Parliament continues to review stakeholder submissions as the bill moves toward finalization.