KRA to track mobile phones in new tax-compliance push
All retailers and wholesalers of mobile devices will be required to only retail or distribute mobile devices that are tax compliant.
What you need to know:
- All mobile phone importers will be required to disclose the IMEI number in their respective import documents submitted to KRA.
- All retailers and wholesalers of mobile devices will be required to only retail or distribute mobile devices that are tax compliant.
The government will from next year (January 1) track all imported and locally assembled mobile phones to monitor tax compliance by manufacturers and distributors, as the government hopes to broaden its tax base.
All local device assemblers, the government says, must upload the International Mobile Equipment Identity (IMEI) Number of each device to the Kenya Revenue Authority (KRA)-provided portal.
This will ensure that all devices are tax compliant, the Communication Authority of Kenya (CA) says.
At the same time, all mobile phone importers (sale, testing, research or any other purpose) will be required to disclose the IMEI number in their respective import documents submitted to KRA.
It is mandatory, the government says, for the devices to be registered in the National Master Database on Tax-Compliant Devices.
“To ensure integrity and tax compliance of the mobile devices in Kenya, the authority hereby notifies all stakeholders, including mobile network operators, involved in the local assembly, importation, distribution as well as connection of mobile devices to local networks, that with effect from January 1, 2025, the … requirements will apply…,” the CA said in a public notice.
For retailers and wholesalers of mobile devices, the government directed, they must ensure that they only retail or distribute mobile devices that are tax compliant.
The CA will provide the means by which the tax compliance status of mobile devices can be verified before purchase by retailers or end-users.
CA Director-General David Mugonyi says mobile network operators must ensure that they only connect devices to their networks after verifying the tax compliance status through a whitelist database, which the government will provide.
“Operators will also be required to provide for the gray-listing of non-compliant devices to facilitate regularisation within a prescribed period, failure to which the devices will thereafter be blacklisted,” Mr Mugonyi said.
“The new requirements will only apply to all devices imported or assembled in the country from November 1, 2024. All existing devices that will be on the mobile networks by October 31, 2024 will not be affected,” the CA said.
The CA is the government’s regulatory agency for the ICT industry in Kenya with responsibilities in telecommunications, e-commerce, cyber security, broadcasting and postal/ courier services.
It is responsible for managing Kenya's numbering and frequency spectrum resources, administering the Universal Service Fund (USF).
But it is also charged with facilitating trade in ICT through clearance of permits for type-approved imported equipment through the Kenya Trade Network Agency (Ken Trade) National Single Window System (TradeNet System/Trade Facilitation Platform).
According to the CA’s latest Sector Statistics Report, mobile (SIM), data/Internet subscriptions, and Internet traffic experienced significant growth in the fourth quarter of the financial year 2023/24.
The authority attributed the surge to the proliferation of 4G and 5G telecommunications infrastructure, rising smartphone penetration, and consumer demand for fast internet.
The period was also marked by a significant increase in satellite internet subscriptions and bandwidth following the licensing and subsequent rollout of Starlink Internet services in the country, the authority said, observing that “this trend is expected to continue in the coming periods considering that this technology provides high-speed, low-latency broadband connectivity, especially in areas where the internet is unavailable or unreliable.”
The mobile (SIM) stood at 68.9 million subscriptions, translating to a penetration rate of 133.7 percent by the end of June 2024.
“In 2023, mobile services generated KES 384.3 billion in revenue, marking a 13.2 percent increase from 2022. On the same trend, investment in the mobile sub-sector grew by 20.6 percent, to record KES 70.9 billion in 2023. The number of employees was 11,339 in June 2024 up from 10,526, with a male-to-female ratio of 57:43,” CA said.
“As of 30th June 2024, mobile money subscriptions stood at 39.8 million translating to a penetration rate of 77.3 percent. This increase is directly proportional to the increase in mobile (SIM) subscriptions.”
This is the windfall that the authority hopes to tap in the subsequent years.
