The bill imposed a 10 percent duty on importation of mobile phones and calculation will based on the cost of mobile phones ordered into the country and other levies.
“Excise duty on importation of cellular phones shall be at 10 percent of excisable value,” read part of the Bill.
Nikhil Hira, an expert from at tax advisory firm Kody Africa LLP, argues that the government introduced the new regulation to act as a revenue generating avenue.
“I see it as a revenue generating measure because of the number of people that want a mobile phone. It doesn’t make a lot of sense because we don’t have a local industry. I would understand if we had a mobile manufacturing industry because we would be trying to protect it,” he told Business Daily.
“The Treasury and MPs have realised that mobile phones are a lifeline for everybody and there are more and more of us that are buying phones and more will want to buy them in future.”
He argued that the end consumer will be the most affected as the local dealers will be forced to hike the prices to recoup their expenses.
“The price for the end consumer is going to go up not just by 10 percent but it will be more because there will be the VAT on that as well,” noted Hira.
Currently, the use of telephone and internet data services already attracts a 20 percent duty which includes a 16 percent VAT.
Money transfer services like M-Pesa also attract a 12 percent duty charge.