Safaricom hikes SIM card, phone prices over new tax

Thursday, July 14th, 2022 17:21 | By
Safaricom CEO Peter Ndegwa
Safaricom CEO Peter Ndegwa. PHOTO/ Courtesy

Telecommunications company Safaricom has announced new hiked prices for its SIM cards and phones on retail, following the implementation of new tax policy.

In a public statement on July 14, 2022, Safaricom said that its SIM cards will retail at Ksh100, including Ksh50 first-time airtime top-up.

"The Government of Kenya has implemented a Ksh50 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. Accordingly, effective 15th July 2022, we will be reviewing our SIM card pricing to Ksh50 plus Ksh50 airtime first top up to include the excise tax," the statement read in part.

Adjustments by Safaricom

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 two new taxes on handsets and SIM cards were introduced in June after Treasury Cabinet Secretary Ukur Yatani submitted the original Finance Bill 2022. Duty on SIM cards was proposed by Kikuyu legislator Kimani Ichung’wah.

According to the latest data from the Communications Authority of Kenya, as of March 2022, there were 64.9 million active SIM subscriptions in Kenya, a drop from 65.1 million subscriptions in December 2021.

The number of smartphones and feature phones connected to mobile networks in Kenya is 26.5 million and 33.6 million, respectively.

This means that the penetration rate of smartphones is at 54.6%, whereas that of feature phones is at 69.2 per cent.

At least 540,000 new mobile phones were activated three months to March 2022, most of them being basic feature phones.

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