Safaricom braces for showdown with KRA on data demand

Safaricom says it has not provided the Kenya Revenue Authority (KRA) with access to the subscriber database, indicating a looming showdown between the taxman and the leading telecommunications service provider.

Safaricom CEO Peter Ndegwa Thursday said the company was keen to uphold its subscribers’ data privacy even as it engages with the taxman on its policy to broaden the taxbase and enforce compliance. 

“The intention of the KRA is to broaden the tax base and to ensure that all devices bought in Kenya pay taxes,” he said while releasing the company's half-year results in Nairobi.

“How it is delivered, I am sure that is something the regulator can work with so that it does not interfere with the subscribers convenience especially visitors, and that whatever is done still protects people’s privacy.” 

In a public notice issued last week, the Communication Authority, CA stated that all manufacturers, retailers and mobile network operators must upload the International Mobile Equipment Identity (IMEI) number of each device 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,” stated the notice from the CA. “This disclosure is mandatory for the registration of the devices in the National Master Database on Tax compliant devices.” 

The IMEI number is the 15-digit number that is unique to each device and can be defined as the fingerprint of the device and is often used to track lost or stolen mobile devices. 

The notice by KRA set a compliance deadline for December 2024 and has raised concern among members of the public and data privacy advocates over infringement of users’ privacy. 

“Today we have people’s IMEI numbers that are not disclosed to anyone and it does not mean that in the future they will be disclosed, there is no event that they will be disclosed, so I don’t know how they want to do it,” said Safaricom CEO Peter Ndegwa. 

“In other countries they have said to the Mobile Network Operators (MNOs) ‘just tell me any number that has not been taxed’ rather than ‘give me the data’ so I suspect they (KRA) will reflect some of the feedback that has been given,” he said.

KRA has for long sought to lay hands on the data of M-Pesa subscribers and merchants and integrate it on the country’s tax registry in a bid to claw tax revenue from the hundreds of billions transacted on the platform every day.

Data from the latest statistics from the regulator indicates that the country has 68.8 million SIM subscriptions as at June this year, a mobile penetration rate of 133 per cent attributed to some subscribers having more than one SIM card. 

With 33.5 million monthly active customers, M-Pesa remains the country’s leading mobile money transfer platform, with Sh77.2 billion in revenues reported in the six months ending September 2024. 

In its notice, the CA directed mobile network operators to ensure that only devices that are verified as the tax compliance on the KRA whitelist are connected and also directed that subscribers visiting the country should register their IMEI numbers at the country’s port of entry.

“It would be important from our end that our customers do not feel inconvenienced,” said Ndegwa.

“Kenya has made a lot of progress on digitisation and I am sure it’s important for the  government to see the country grow in this digital footprint. Even as KRA tries to broaden the tax base, they should not do it in a way that affects the ability of Kenya to advance in this respect.”