Mobile phones have become the top items among under-declared imports by small traders in Kenya, reflecting a widespread practice where these high-value electronic goods are brought into the country but declared to customs authorities at lower than actual values. This under-declaration is done to evade paying the full amount of import duties and taxes, which include a 25.0% duty, 10.0% excise tax, and 16.0% VAT on the customs value according to KRA. As a result, the government loses significant revenue, and the market is distorted by the inflow of cheaper, and sometimes counterfeit or uncertified, devices.
To address this challenge, beginning in 2025, the Kenyan government introduced stringent regulations requiring the mandatory declaration and registration of mobile phones’ International Mobile Equipment Identity (IMEI) numbers with the Kenya Revenue Authority (KRA). The IMEI is a unique 15-digit identifier that helps track and verify the authenticity and tax compliance of mobile devices. The government’s goal is to enhance tax compliance, protect consumers from counterfeit devices, and clamp down on tax evasion.
Under these new measures, importers must declare IMEI numbers at customs, and all mobile devices sold in the country must be tax compliant. Mobile network operators require phones to be verified and registered on a government database before they can be allowed on the network. Non-compliant phones may be blacklisted, cutting off their access to services. This system aims to restrict the sale and use of illegally imported phones and ensure everyone pays the appropriate taxes.
Despite these efforts, challenges persist. Many small traders still under declare values or try to evade the registration rules, and concerns have been raised over data privacy related to the IMEI tracking system. The High Court of Kenya has even ruled some government directives on mandatory IMEI disclosure unconstitutional on privacy grounds. Nonetheless, the government continues to enhance regulatory frameworks to balance tax integrity with citizens’ rights.
The high penetration of mobile phones in Kenya where the number of mobile subscriptions now exceeds the population makes the mobile device market a crucial sector for tax revenue. The increasing reliance on mobile services, mobile money, and smartphones means that ensuring compliance is critical both for government revenue and for consumer protection.
Mobile phones topping the list of under-declared imports by small traders highlights the ongoing struggles between customs enforcement and evasion tactics in Kenya’s import market. The government’s adoption of IMEI registration and declaration initiatives is a significant policy response to enhance tax compliance and curb counterfeit sales. Success will depend on effective enforcement, ongoing public education on tax obligations, safeguarding privacy rights, and supporting legal trade for genuine businesses. Achieving these goals will bring fairness to the industry, protect consumers, and boost tax revenues critical for national development.
