KRA to Start Monitoring Mobile Phones in New Tax Compliance Crackdown

The Kenya Revenue Authority (KRA) is set to introduce a new system to monitor mobile phones sold in Kenya for tax compliance beginning in January 2025.

This move targets local manufacturers and importers, requiring them to submit International Mobile Equipment Identity (IMEI) numbers for all mobile phones through a newly created portal.

Retailers and network providers will be required to sell or activate only tax-compliant devices. Phones found to be non-compliant may be blacklisted if not regularized.

The primary goal of this initiative is to enhance tax collection from the rapidly growing mobile phone market in Kenya. KRA aims to ensure that all mobile phones sold in the country have met tax obligations, thereby minimizing tax evasion.

As part of this effort, the KRA will collaborate with the Communication Authority of Kenya (CA) and other stakeholders to enforce the new rules. The CA will direct service providers like Safaricom, Airtel, and Telkom to prevent registration of blacklisted devices on their networks.

What About Older Devices Already in Use?

Devices already in use before November 2024 will be exempt from these compliance checks. This exemption is designed to prevent disruption for existing mobile phone users while still targeting future sales.

According to KRA, monitoring phones being used on Kenya’s network will ensure they have cleared the necessary taxes. Users whose devices are found to be non-compliant may face blacklisting of their phones if taxes are not paid.

The KRA expects this system to improve overall tax compliance and reduce revenue loss in the mobile phone sector, strengthening its efforts to increase Kenya’s tax base.

However, it is worth noting that in most jurisdictions around the world, IMEIs are used for only security purposes rather than tax compliance. Only time will tell how this move will disrupt the mobile phone industry from a seller and consumer standpoint.