KRA's chairman revives the 25% tax on phones when they first connect, which Parliament threw out
KRA board chairman Ndiritu Muriithi has defended a proposal to charge excise duty of 25% on a phone's value when it is first activated on a Kenyan network, an idea that was in this year's Finance Bill until Parliament's Finance Committee recommended removing it and it was dropped from the Finance Act. Today phones pay 10% excise when they are imported or made locally, and that has not changed. Speaking in Laikipia, Muriithi said import checks are being "beaten by under-declaration and the misuse of consolidated cargo", where several traders share a container and high-value phones are hidden among cheap ones. In one case reported by Business Daily in September, investigators found 55,607 basic smartphones in a shipment declaring 3,000, plus 309 undeclared high-end phones. A tax charged at activation would give KRA a second checkpoint at the network, and the Treasury argued honest importers would pay later instead of tying up cash in stock. The objections that sank it have not gone away. The Bill never defined "activation": switching on, inserting a SIM, or first connecting. Second-hand buyers could not tell whether a phone had been taxed. It would probably need IMEI tracking, and the High Court quashed KRA and CA directives demanding IMEI data in 2025. And the cost would land on buyers who depend on a phone for M-PESA and work. KRA has not published the size of the revenue gap. Meanwhile it is tightening the border instead: an October notice requires importers, agents and consolidators to disclose each importer and the value of goods in shared shipments, and since Sunday, imports without a Kenyan digital marine insurance certificate are being held at customs. There is no new phone tax in force, but the idea may come back when the next Finance Bill is drafted.
Sources: Techweez · TechTrends · Tech-ish
