MPs raise concerns over KRA's plan to monitor phones in tax compliance drive

The Communications Authority (CA) has come under scrutiny from Parliament over its plan to grant the Kenya Revenue Authority (KRA) access to citizens' phones.

The National Assembly’s Committee on Communication, Information, and Innovation asked CA Director General David Mugonyi to clarify the implications of the proposed system on privacy and personal data protection.

The Kenya Revenue Authority (KRA) is working to register all mobile devices in the country as part of a new effort to ensure tax compliance.

In a public notice issued earlier this week, the Communications Authority announced that phone manufacturers, retailers, and mobile network operators would be required to upload the International Mobile Equipment Identity (IMEI) numbers of all devices to a KRA-provided portal.

“All mobile phone importers will be required to disclose the IMEI number in their respective import documents submitted to the KRA,” the CA’s notice stated.

However, Committee Chairman John Kiarie raised concerns about the potential risks to personal data, suggesting that sensitive information could end up in the wrong hands. He warned that this could discourage Kenyans from engaging in online transactions for fear of increased surveillance.

“The elephant in the room is: what exactly are we allowing KRA to access on an individual’s phone under the guise of data protection? The issue is not about registering IMEI numbers. How do we reassure Kenyans who might avoid digital transactions to escape scrutiny?” Kiarie questioned.

Tetu MP Geoffrey Wandeto also expressed concerns about the CA’s ability to monitor and enforce compliance across all communication devices entering the country, citing the earlier controversy surrounding Worldcoin, which had raised fears among Kenyans.

Wandeto also questioned how the system would affect expatriates and visitors, emphasizing the need to ensure that people’s mobility was not hindered. He argued that visitors should not face unnecessary inconvenience and that a balance should be struck between tax compliance and allowing people to use their devices freely while in the country.

“We would like to know what regulatory mechanisms the Communications Authority of Kenya has put in place to identify and address non-compliant devices being imported,” Wandeto asked.

In response, Mugonyi explained that the CA had received a presidential directive to implement the system, which is primarily focused on ensuring device integrity and tax compliance, rather than monitoring individual transactions. He assured the committee that KRA would only send notifications to users who activate unregistered devices, informing them of unpaid taxes. If taxes are not paid, the unregistered device’s IMEI would be blacklisted, preventing it from connecting to local networks.

Mugonyi further reassured the committee that tourists and diplomats would be given a grace period, during which their devices would be placed on a temporary "grey list." This would allow the devices to be used without immediate tax obligations. He stressed that the public would have an opportunity to participate in the process to ensure transparency.

“I would like to inform Kenyans that this engagement is not about monitoring the transactions they carry out on their phones. The goal is to ensure that the right products are in the country, and the tax compliance aspect is strictly for that purpose. KRA will not have access to people’s data,” Mugonyi clarified.

He also announced that mobile devices registered on Kenyan networks before October 31, 2024, would be exempt from further compliance checks, assuring current users that they would not face disruptions. The system will only apply to mobile devices registered after this date, with those already registered considered tax-compliant.

Edward Kisiangani, Principal Secretary for Broadcasting, acknowledged the potential for international tax overlap and suggested the need for data-sharing agreements with friendly countries to avoid double taxation on imported devices that may already have tax implications in other countries.

The Communications Authority has set the rollout date for the new system after October 31, 2024. Under the new rules, importers and local manufacturers will be required to register the IMEI numbers of mobile devices they bring into Kenya, ensuring that all applicable taxes are paid before a device is activated on a local network.