CA on Thursday, October 24 announced new requirements for mobile device assemblers, importers, retailers and wholesalers, and mobile network operators set to take effect on January 1, 2025.
The Communications Authority of Kenya (CA) has announced plans to crack down on new mobile phones that will not comply with new tax requirements, a move that could leave Kenyans purchasing those devices have to contend with them being switched off.
CA on Thursday, October 24 announced new requirements for mobile device assemblers, importers, retailers and wholesalers, and mobile network operators set to take effect on January 1, 2025.
The authority announced that all local assemblers will be required to upload the International Mobile Equipment Identity (IMEI) Number of each locally assembled device to the portal provided by the Kenya Revenue Authority (KRA).
“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 1st, 2025, the following requirements will apply for all mobile phone devices in Kenya,” announced CA.
Communication Authority of Kenya (CA) headquarters in Nairobi. /FILE
“All local device assemblies must upload the International Mobile Equipment Identity (IMEI) Number of each assembled device to the KRA-provided portal. This will ensure that all locally assembled devices are tax-compliant.”
Furthermore, CA mandated all mobile phone importers (sale, testing, research or any other purpose) to disclose the IMEI Number in their respective import documents submitted to the KRA. This disclosure is mandatory for the registration of the devices in the National Master Database on Tax-Compliant Devices.
The directives stretch to retailers and wholesalers of mobile devices who must ensure that they only retail or distribute mobile devices that are tax compliant. “The Authority will provide the means by which the tax compliance status of mobile devices can be verified before purchase by retailers or end-users,” added the notice.
Mobile network operators will be compelled to ensure that they only connect devices to their networks after verifying the tax compliance status through a whitelist database of compliant devices, which will be provided by the Authority.
Operators will also be required to provide for the grey-listing of non-compliant devices to facilitate regularization within a prescribed period, failure to which the devices will thereafter be blacklisted.
“The new requirements will only apply to all devices imported or assembled in the country from November 1st, 2024. All existing devices that will be on the Mobile Networks by 31st October 2024 will not be affected,” added CA.
Higher Prices
In the long run, the directive could carry the following impacts; Local assemblers and importers targeting the Kenyan market will have to deal with higher costs due to the need to ensure that they are tax-compliant and submit detailed documentation for each device. These costs could be passed on to Kenyans, thus leading to higher retail prices for the devices.
The announcement could also encourage mobile manufacturers to set up more local assembly points in Kenya, to evade the double taxation effect as an importer and a seller.
CA’s directive might also lead to a more regulated mobile sales market with increased compliance, as Kenya sets on a trajectory to stabilise prices and reduce fluctuations caused by non-compliant imports.
The announcement came a week after Chief Government Advisor Moses Kuria announced that the government would soon be targeting Kenyans who own phones imported into the country with no record of having paid applicable taxes by automatically blocking them from activating any network on the phones.
The former Cabinet Secretary explained that the move is aimed at maximizing revenue collection in the telecommunications market as the state looks for alternative revenue streams. “We will automatically block from activating on any network any mobile phone imported into the country with no record of having paid applicable taxes,” Kuria said in a statement on X.
A person using their phone. /BBC
