Mandating tax compliance verification for mobile devices could increase tax revenue collection and reduce economic losses from illicit device imports. Counterfeit devices are often less secure and more vulnerable to cyber threats. Requiring a database of verified, tax-compliant devices can improve device authenticity and network security for end-users.

The Communications Authority of Kenya (CA) has instructed mobile network operators to connect devices only after verifying their tax compliance, according to a public notice posted on its X page on October 24. This directive, effective from November 1, 2024, requires operators to consult a Kenya Revenue Authority (KRA) database of compliant devices, ensuring that only tax-compliant phones are connected to their networks.

Under these new regulations, local device assemblers, importers, retailers, and wholesalers must upload the International Mobile Equipment Identity (IMEI) numbers of all mobile phones into a KRA-provided portal. All devices connected to networks before October 31, 2024, are exempt from these rules. Starting January 1, 2025, the KRA will track all locally assembled and imported devices to maintain tax compliance.

Operators will also have to implement a “gray-listing” system for non-compliant devices, granting a limited period for tax regularization. If compliance isn’t met, the devices will be blacklisted. Retailers and wholesalers are similarly required to verify the tax status of devices before sale, and the CA will provide a verification mechanism for end-users.

These measures are part of Kenya’s ongoing efforts to ensure regulatory compliance in the telecommunications sector, strengthen the National Master Database on Tax-Compliant Devices, and address device-related security and network integrity.

A study conducted by Kenya's Anti-Counterfeit Authority between October 2019 and February 2020 revealed that the energy, electrical, and electronics sector including mobile devices was the second most impacted by counterfeiting, accounting for 14.67% of the Kes 153.1 billion ($1.18 billion) the government lost in revenue in 2018. This poses risks not only to users but also to network integrity and security. Counterfeit devices are often less secure and more vulnerable to cyber threats. By requiring a database of verified, tax-compliant devices, the CA aims to improve device authenticity and network security for end-users.

Hikmatu Bilali