KRA to begin monitoring mobile phones in tax compliance push

The Kenya Revenue Authority (KRA) will begin monitoring all locally assembled and imported mobile phones sold in Kenya from January 1, 2025, to ensure tax compliance.

The Communication Authority of Kenya (CA) has announced new regulations requiring manufacturers, importers, retailers and mobile network operators to upload International Mobile Equipment Identity (IMEI) numbers of all devices assembled or imported after November 1, 2024, into a KRA portal for tax compliance monitoring.

For local assemblers, CA says all assemblies must submit the IMEI number of each assembled device to the tax authority, similar to all mobile phones imported for sale, testing, research “or any other purpose.”

“This disclosure is mandatory for the registration of the devices in the National Master Database on Tax-Compliant Devices,” CA says.

Retailers and wholesalers on the other hand are directed to only sell compliant devices.

“[KRA] will provide the means by which the tax compliance status of mobile devices will be verified before purchase by retailers or end-users,” the directive states.

Mobile network operators like Safaricom, Telkom and Airtel meanwhile have been directed to only connect devices to their networks after verifying the tax compliance status through a whitelist database of compliant devices, which KRA will provide.

“Operators will also be required to provide for the grey-listing of non-compliant devices to facilitate regularisation within a prescribed period, failure to which the devices thereafter be blacklisted,” CA says.

The communications regulator says the new requirements only apply to all devices imported or assembled in the country from November 1, 2024. It said all existing devices on the mobile networks by October 31, 2024, will not be affected.

An IMEI number is a 15-digit number unique to each device.

Mobile network providers use IMEI numbers to identify valid devices.

In most countries worldwide, IMEI numbers are often used for security purposes, not tax compliance. Most jurisdictions handle tax compliance at customs and clearance points.

Law enforcement agencies, through these network operators, use them to track devices that may be stolen or compromised. 

In this case, the IMEI numbers are used to prevent a stolen phone from accessing the network, even if the thief changes the phone's SIM card.