Deliberations on the Finance Act, 2022, have been ongoing for a few months. It covers a wide range of topics related to taxation goods and services, including those that are sold locally or internationally.
The bill proposed that the adjustments made therein would take effect on July 1 today after a thorough examination over the course of the entire month of April.
Now that the Act imposes a 10% additional tax (excise duty) on the importation of phones, customers, such as those who purchase phones, should be informed that they will have to pay more for the handhelds. Every imported SIM card is subject to an extra excise fee of KES 50.
Here are some statistics on the penetration of SIM cards and phones to provide more context for this growth.
In Kenya, there were 64.9 million active SIM subscriptions as of March 2022. This represents a decrease from the 65.1 million subscriptions that were noted in the prior three months. However, these figures indicate that there is a 131.4 percent penetration of mobile devices.
In Kenya, there are 26.5 million smartphones and 33.6 million feature phones that are connected to mobile networks, respectively.
This indicates that while feature phones have a penetration rate of 69.2 percent, smartphones have a penetration rate of 54.6 percent.
It should be noted that the Finance Act of 2022 did not include the additional tax on the aforementioned devices. As MPs examined the bill in May, a new proposition was presented.
Additionally, the tax has been supported as a means of funding the government.
The local phone manufacturing industries, which as of this writing do not exist locally, are not protected.
Since Kenyans only buy imported phones, the new tax will apply to any local phone purchases.
Last but not least, Kenyans who want to change or register a SIM card will pay more for the service (KES 50).
