On Thursday, October 24, 2024, the Communications Authority of Kenya (CA) triggered some mixed reactions after announcing that all imported and locally assembled mobile phones will be tracked to monitor tax compliance by manufacturers and distributors.
In a notice, the authority indicated that all local device assemblers must upload the International Mobile Equipment Identity (IMEI) number of each device to the Kenya Revenue Authority (KRA)-provided portal.
At the same time, CA noted that all mobile phone importers will be required to disclose the IMEI number in their respective import documents submitted to KRA.
CA informed Kenyans that the new measures would be implemented starting January 2025.
Ndii’s explanation
The announcement caught many Kenyans by surprise prompting others to seek clarification from President William Ruto’s Economic Advisor David Ndii.
One of the concerned social media users indicated that the move would make the mobile phone-importing business crumble thus affecting the Kenyan economy.
“Mobile phone one will collapse import business of phones and harm KRA more than aid. They should take what happened at Eldoret Airport as the likely outcome!” one social media user, @KiproMw, wrote on X.
However, Ndii noted that the move is aimed at sealing the gaps used by some of the importers to evade honouring their tax obligations. Ndii added that the sector is characterised by smuggling with most dealers using unprocedural tactics to avoid paying taxes.
He thus maintained that the move is key to increasing tax compliance in the country.
To reduce the tax burden on employed Kenyans, Ndii further made it clear that the government will unveil more measures to expand the tax bracket.
“The consolidated cargo business is a trojan horse for mobile phone smuggling. We are sealing tax leakage loopholes one by one. It is very unfair for the tax burden to fall on payroll workers and corporates who can’t escape the tax net,” Ndii explained.
The consolidated cargo business is a trojan horse for mobile phone smuggling. We are sealing tax leakage loopholes one by one. It is very unfair for tax burden to fall on payroll workers and corporates who cant escape the tax net. You are going to be hearing a lot of squealing https://t.co/bzveq6oTw4
— David Ndii (@DavidNdii) October 26, 2024
In the new move, retailers and wholesalers of mobile devices will be required to sell only tax-compliant gadgets.
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.
“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 CA said in a public notice.
