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Subscribers to pay more for Safaricom phones and SIM cards

Telecommunications company Safaricom has announced new prices for its SIM cards and mobile phones on retail, following the implementation of new tax policy. The telco introduced changes which took effect on July 15.

In a statement, Safaricom said that its SIM cards will now retail at Sh100, including Sh50 first-time airtime top-up. The move follows the introduction of a Sh50 excise duty on imported ready-to-use SIM cards through the 2022 Finance Act.

“The Government of Kenya has implemented a 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. Accordingly, effective 15th July 2022, we will be reviewing our SIM card pricing to Sh50 plus Sh50 airtime first top up to include the excise tax,” Safaricom said in a statement.

Safaricom’s competitors, Airtel and Telkom, currently do not charge for new subscriptions. They are, however, expected to pass the new cost of the SIM card taxes onto consumers.

Phones sold by Safaricom will also cost more, to reflect a 10 per cent excise duty on the importation of cellular phones. The new prices will also reflect a 25 per cent import duty on phones contained in the East African Community Common External Tariff (CET).

“Phone prices will be adjusted to include the 10% excise tax and 25% import duty as existing stock levels are replaced with new stock on which the new taxes apply,” Safaricom said.

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 MP 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 higher prices of phones and SIM cards are set to increase the cost of communication for Kenyans already grappling with the high cost of living. Key commodities including food and fuel are currently going for record-high prices.

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