There is an imminent shortage of smartphones in the country following a crackdown by the state on cargo consolidation.
The Kenya Revenue Authority (KRA) called on importers of smartphones to accelerate the verification of their consignment as part of efforts to address the stock outs that has hit the market.
Moreover, the weak shilling and government crackdown pushed the cost of importing smartphones even as some sellers shift sales to neighboring countries.
Meanwhile, several retailers have reported stock outs of the gadgets in the market following the taxman’s move to review the treatment of consolidated cargo effective March this year.
Before KRA’s announcement, consolidated cargo was charged at the rate of Ksh200 per kilogram.
Also Read: KRA Records Revenue Growth Amid Tough Times
However, the change implied that it would be charged per unit value hence necessitating 100% verification of cargo.
In addition, KRA noted that the 100% verification of imports would allow for the payment of tax based on transaction value of the cargo as opposed to the rate of Ksh200 per kilogramme.
Traders feel the pinch
The increase in the cost of importation has greatly affected thousands of small-scale traders of consumer goods such as second-hand clothes, mobile phones, electronics and other household items.
The traders are now paying more to clear their cargo.
Similarly, KRA announced that additional taxes would be added to undeclared/concealed items to ensure everyone pays their fair share of taxes,” KRA noted
Nevertheless, smartphone dealers are likely to suffer more in the new tax regime as they pay higher tax rates based on the transaction value of the gadgets.
Meanwhile KRA acting Commissioner-General Rispah Simiyu said that they noted a significant level of undervaluation and lack of full disclosure in the declarations.
Also Read: KRA Suspends Payment of Tax Reliefs
She added that KRA had found that importers are concealing smartphones as feature phones to evade paying the requisite tax.
Feature phones are among goods whose tax rate has been maintained at Sh200 per kilogramme.
