One Cameroonian soldier also lost his life in the clashes, Communications Minister and government spokesman Issa Tchiroma Bakary said in a statement read out on television and radio.
The toll was "the heaviest loss yet" suffered by Boko Haram on Cameroonian soil, he said, and comes at a time of fears of increased cross-border raids by the Nigeria-based group into Cameroon, Chad and Niger.
The spokesperson said the attack began in the early hours when "several hundred" Islamist fighters took advantage of thick fog to cross over from Nigeria and tried to storm the town's military base, where an elite army unit is stationed.
Intense fighting erupted near the base, lasting for more than five hours before the attackers fled back towards the border, the spokesman said, adding that the army had seized a significant arsenal of heavy weaponry from the militants.
A local source said residents fled "as soon as people heard the first gunfire" in the town.
The attack on Kolofata comes after the group's leader Abubakar Shekau vowed last week in a YouTube message to hit back at Cameroon for sending warplanes into action against the fighters in December after they seized a military camp.
Monday's offensive was the first by Boko Haram on the town since the army's elite Rapid Intervention Battalion was deployed to defend the area after deadly attacks in 2014.
Several people were killed in an attack on Kolofata in July and 27 people, including the wife of a deputy prime minister, were held hostage for several weeks by the Islamists
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