National Assembly Committee Grills CA on New Mobile Device Tax Compliance System
The National Assembly’s Committee on Communication, Information, and Innovation, led by Hon. John Kiarie, has expressed concerns over a new initiative by the Communications Authority (CA) aimed at enhancing the integrity and tax compliance of mobile devices in Kenya.
During a heated session on Wednesday, the committee sought clarity from the Director-General of the Communications Authority, Mr. David Mugonyi, over the potential privacy risks, data protection issues, and enforcement mechanisms of the proposed system.
The new system, which is scheduled to take effect after October 31, 2024, will require importers and local manufacturers to register the International Mobile Equipment Identity (IMEI) of mobile devices brought into the country. The devices will be subject to a tax compliance check before being activated on any local network. Devices that are not registered or that fail to meet the compliance standards will be “greylisted,” preventing them from accessing Kenyan networks until applicable taxes are settled.
However, the Committee raised serious concerns about the implications for privacy and data protection, especially regarding the involvement of the Kenya Revenue Authority (KRA) in the process. Hon. Kiarie specifically questioned how the system would balance tax compliance with the protection of citizens’ personal data.
“The issue isn’t with registering IMEIs. What exactly are we allowing KRA to access on an individual’s phone under the guise of data protection?” asked Hon. Kiarie, voicing concerns that Kenyans might avoid online transactions out of fear of increased surveillance.
In response, Mr. Mugonyi sought to reassure the Committee, explaining that the new system was solely focused on device integrity and ensuring tax compliance. He emphasized that the KRA would not have access to personal data on the devices. “This engagement has nothing to do with the transactions we carry out on our phones,” he clarified. “We want to ensure the right products are in the country, and the tax compliance aspect is strictly for that.”
Mr. Mugonyi further explained that the system would notify users when they activate a new device that has not paid the necessary taxes, placing the device’s IMEI on a blacklist. Until taxes are settled, the device will be unable to connect to local networks.
However, the Committee also expressed concerns over the impact of the system on expatriates, tourists, and short-term visitors. Hon. Geoffrey Wandeto pointed out that such individuals should not face unnecessary restrictions on their mobility or their devices. In response, Mr. Mugonyi assured the Committee that a grace period would be given to tourists and diplomats. During this time, their devices would be placed on a temporary “greylist,” allowing them to use their devices without immediate tax obligations.
Prof. Edward Kisiangani, Principal Secretary for Broadcasting, also highlighted the potential for international tax overlap, suggesting that Kenya could consider data-sharing agreements with other countries to avoid double taxation of imported devices.
The CA’s public notice, issued on October 24, 2024, outlined the planned system rollout, which will focus initially on new mobile devices imported after October 31. Devices that were previously registered on Kenyan networks will be exempt from the new compliance checks.
Despite the CA’s assurances, Hon. Kiarie emphasized the need to strike a balance between enhancing tax compliance and protecting privacy. “We must ensure that privacy is not compromised in the pursuit of tax compliance,” he concluded. “This is a critical issue that needs further scrutiny.”
As the government moves forward with the initiative, the ICT Committee remains vigilant, urging the CA to address the privacy concerns and enforce transparent mechanisms to safeguard citizen data while promoting tax compliance.
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