FINANCE ACT

Safaricom increases sim card, phone prices

Starting Friday, July 15, Safaricom SIM cards will retail at Sh50 plus Sh50 airtime first top up.

In Summary

•The government has started implementing the Sh50 excise tax on SIM cards and  a 10 per cent excise tax on imported phones as part of the Finance Act 2022.

•Starting Friday, July 15, Safaricom SIM cards will retail at Sh50 plus Sh50 airtime first top up.

A mobile phone subscriber inserts a Sim card in a phone.
A mobile phone subscriber inserts a Sim card in a phone.
Image: FILE

Mobile phones and sim cards will be more expensive in Kenya as the Finance Act 2022 takes effect.

Mobile network operator Safaricom has announced review in the price of its products to match the hike in taxes. 

Starting Friday, July 15, 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 per cent excise tax and 25 per cent import duty as existing stock levels are replaced with new stock on which the new taxes apply," the telco said in a statement on Thursday.

The Act imposes a 10 per cent excise duty on the importation of cellular phones. This is besides Sh50 excise duty on every imported ready-to-use SIM card.

The government has started implementing the Sh50 excise tax on SIM cards and  a 10 per cent excise tax on imported phones as part of the Finance Act 2022.

In addition, the East African Community has applied a 25 per cent 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 during the debate by the House last month.

Safaricom's competitors, Airtel and Telkom, currently do not charge for new SIM subscriptions.

However, they are expected to adjust prices upwards starting next week adding to the plight of consumers who are already grappling high cost of other commodities.

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.