Kenyans buying new mobile phones that will not comply with new tax requirements will have to contend with the devices being switched off, following the latest directive from the Communications Authority of Kenya (CA).
This is after the CA directed all phone business stakeholders to ensure that they comply with new taxation requirements that would be applied from next week on November 1.
''Operators will also be required to provide for the gray-listing of non-compliant devices to facilitate regularization within a prescribed period, failure to which the devices will thereafter be blacklisted,’’
The latest directive will only apply to all devices imported or assembled in the country beginning November 1, this year. Devices that will already be on the mobile networks by October 31 will not be affected.
The authority announced that all local phone assemblers had to upload the International Mobile Equipment Identity (IMEI) Number of each assembled device to the taxation database, to enable the government track sales.
The regulator further directed all mobile phone importers to ensure that they disclose IMEI numbers of all devices that they plan to import. Further, CA reminded importers that the directive was a mandatory practice in exercise of government policies.
The CA’s directive to importers of mobile devices will also target agencies that import phones for the purposes of research, testing and any other purposes.
''This disclosure is mandatory for the registration of the devices in the National Master Database on Tax-Compliant Devices,’’ the Communications Authority directed.
The Authority further directed mobile phone retailers and wholesalers to ensure that they only engage in trade of devices that were compliant with the latest directive with the government set to enforce the latest directive.
''Retailers and wholesalers of mobile devices 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,’’ CA added.
Local telcos engaging in network provision were also ordered to ensure that they only allow tax compliant devices to be connected to their networks. CA added it would provide them with a whitelist database of compliant devices.
Long Term
In the long run, the directive might have the following impacts:
Local assemblers and importers targeting the Kenyan market may likely grapple 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.
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.
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