The Kenyan smartphone market is facing challenges due to taxation measures and supply shortages, leading to increased prices and limited availability. The Kenya Revenue Authority (KRA) aims to curb tax evasion, impacting vendors and consumers alike.

There is currently a shortage of smartphones in Kenya, with many vendors struggling to find stock. Some have had to close down or reduce operations, while those still selling smartphones have raised prices. The shortage has made it difficult for Kenyans, who prefer budget-friendly entry-level smartphones, to afford the devices.

KRA's new directive requires importers of consolidated cargo to pay taxes based on the transaction value instead of a fixed duty per kilogram. This change was implemented to address abuse and tax evasion by some importers who under-declared the value of high-end mobile devices. The new taxation measures and supply chain disruptions have led to rising smartphone prices in Kenya.

The delayed customs clearance process, as a result of the new directive, has further limited the availability of smartphones in the market. Additionally, some vendors are limiting their stock due to security concerns arising from political protests that occasionally turn violent.

Currency exchange rate fluctuations and supply chain disruptions have also contributed to the surge in smartphone prices. As a result, some smartphone models now cost 10-20% more than before.

Rogue vendors who have evaded taxes while importing smartphones are facing consequences, as the KRA is cracking down on tax cheats. The implementation of taxation measures may lead to fewer players in the industry and higher prices for consumers.

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