Safaricom is among the first retailer to increase smartphone and sim card prices following a tax hike in the Finance Act 2022.
The telco announced the review in the price of its products to match the hike in taxes last week, now, Safaricom SIM cards will retail at Sh50 plus Sh50 airtime first top up to include the excise tax.
“Phone prices will be adjusted to include the 10 percent excise tax and 25 percent import duty as existing stock levels are replaced with new stock on which the new taxes apply,” the telco had said in a statement last Thursday.
The Finance Act 2022 imposes a 10 percent excise duty on the importation of cellular phones. This is besides the Sh50 excise duty on every imported ready-to-use SIM card.
The government has also started implementing the Sh50 excise tax on SIM cards and a 10 percent excise tax on imported phones as part of the Finance Act 2022.
In addition, the East African Community has applied a 25 percent import duty on phones as part of the Common External Tariff.
The two new duties on the purchase and use of mobile phones were not part of the original Finance Bill 2022 submitted by Treasury Secretary Ukur Yatani but were introduced by Kikuyu Member of Parliament Kimani Ichung’wah during a debate that saw last-minute amendments added to the Bill.
Safaricom’s competitors, Airtel and Telkom, who currently do not charge for new SIM subscriptions are expected to adjust prices upwards starting next week adding to the plight of consumers who are already grappling with the high cost of living.
Data from the Communications Authority of Kenya shows some 540,000 new mobile phones were activated three months to March 2022. The bulk of the additional mobile phone devices were feature phones.
This brought the number of mobile phones in March to 60.1 million from 59.56 million last December.