From 1st January 2025, The Kenya Revenue Authority (KRA), in collaboration with the Communications Authority of Kenya (CA), will track all imported or locally assembled mobile phones to ensure taxes on the devices are paid.
All mobile phone manufacturers and importers, as well as wholesalers and retailers, have been ordered to upload the International Mobile Equipment Identity (IMEI) number of each mobile device to KRA portal.
Consequently, only mobile phones whose IMEI numbers have been uploaded and paid taxes for, will be distributed and sold in Kenya.
Mobile networks have also been directed to connect only to those devices whose tax compliance status has been verified from a database provided by CA.
“The authority will provide means by which tax compliance status of mobile devices can be verified before purchase by retailers or end-users,” said CA in a statement.
Mobile phones that will not have their IMEI numbers uploaded for tax compliance will be greylisted by the CA. The authority will provide a window of opportunity for their distributors to regularize their status, after which when it elapses, the devices shall be blacklisted.
“The new requirement 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 authority further stated.
While the CA database can be regarded as a means to determine tax compliance of items bought or sold, there is concern that the data may be used for other not-so-reasonable purposes. With the government possessing a mobile phone’s IMEA number, one’s exact location can be determined, thus rousing fears of state surveillance.
KRA’s modus operandi in pursuing tax compliance over the years has involved tracking business transactions in a controversial manner that may be regarded as an invasion of privacy. Over a week ago, KRA also announced that it will integrate with cryptocurrency exchanges to monitor transactions worth KSh 2.4 Trillion yearly and collect taxes.
After the fall of the Finance Bill 2024 due to unfavourable tax policies, KRA has been forced to devise new measures to collect revenue. To broaden the tax base, KRA has resorted to technology to net evaders and heightened its focus on previously ignored revenue spots.
The taxman’s targets have been soaring, aiming to surpass KSh 3 trillion in collections by the end of 2024/2025. These targets over the years, in a tough business environment, remain unfulfilled because KRA attempts to collect higher taxes have increasingly led to traders employing avoidance strategies or hiking prices thus selling less items.
