At the recent Mobile World Congress (MWC) in Kigali, a bold proposal took centre stage: African telecom operators and government leaders called for the removal of import duties and VAT on smartphones priced under $100. This clarion call came with the aim to accelerate internet access, digital skills, and participation in the digital economy for millions currently excluded by high cost of devices.
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In many African markets, taxes and import duties can inflate the retail price of a smartphone by over 30%, putting even basic devices out of reach for low-income consumers. GSMA Intelligence estimates that ultra-affordable smartphones, priced between $30 and $40, could connect up to 70 million new users in Sub-Saharan Africa. This can only be achieved if network coverage and digital literacy expand in tandem.
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Rwanda presents a good case study on policy-driven digital inclusion. To drive this inclusion, Rwanda has defined its approach to connectivity as a necessity, and not a luxury as part of its national broadband policy. For example, the number of 4G subscribers is projected to increase tenfold to 5 million users by mid-2025. In addition, broadband now reaches 1,000 health facilities and 4,000 schools. Beyond the above, Rwanda follows a targeted policy reforms framework, public-private partnerships, and aggressive digital literacy campaigns to drive digital inclusion.
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The proposal to exempt entry-level smartphones from taxes presents a classic policy trade-off. While such exemptions may reduce short-term government revenues, the long-term gains could be substantial: a more digitally enabled workforce results in increased tax receipts from new jobs, and greater VAT collection from an expanded digital economy. To succeed, the design of these exemptions is crucial. Policymakers should consider time-bound, targeted measures with sunset clauses and regular reviews to safeguard fiscal sustainability.
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Effective administration is equally important. Clear eligibility criteria, robust import verification, and anti-evasion measures are needed to prevent abuse and market distortions. Complementary fiscal strategies–such as expanding the tax base in other digital sectors or incentivizing local assembly and repair can help offset potential revenue losses while fostering local mobile phone assembly industry.
Rwanda’s success also highlights the importance of policy alignment and public-private collaboration in attracting investment for network expansion. As operators like Axian Telecom aim for 95% 4G coverage by 2027, blended financing models–combining development finance, public funds, and private capital–will be key to scaling infrastructure sustainably.
Yet, device affordability must not come at the expense of quality. Minimum standards for memory, battery life, and durability are essential to prevent the market from being flooded with unreliable devices that erode consumer trust. Tying tax exemptions to local value addition–such as assembly, repair, and service centres can further boost job creation and reduce the total cost of ownership for consumers.
The broader social benefits of digital inclusion are clear. Programmes like “1 Million Coders” and widespread digital literacy campaigns can turn device access into real opportunities for education, health, entrepreneurship, and financial inclusion. Policymakers should ensure that exemptions are paired with investments in digital skills and public service connectivity, and that special efforts are made to close gender gaps in access and usage.
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The Kigali discussions provide insights into key questions – how to expand digital inclusion rapidly while preserving fiscal stability, ensuring device quality, and preventing market distortions. A carefully designed, time-limited tax exemption for entry-level smartphones–paired with quality standards, local value incentives, and network expansion–can unlock substantial social and economic benefits.
Rwanda’s experience demonstrates what is possible when policy, public investment, and private enterprise align around a shared digital vision.
The writer is a legal and tax specialist with over nine years of experience in international and domestic taxation. He leads complex tax engagements across sectors and is also a recognized trainer in Rwanda’s tax space.
