The Kenyan government proposed a tax hike on telecoms services and mobile money transfers in the country, a move which could lead to a rise in prices for consumers.
Reuters reported Kenya’s president Uhuru Kenyatta issued documents, as expected, to parliament proposing a rise on excise duty for airtime and data services from 10 per cent to 15 per cent, as well as raising tax on mobile money transfer fees from 10 per cent to 12 per cent.
Documents seen by Reuters show Kenyatta also wants a 20 per cent excise duty on fees charged by banks, mobile money transfer services and other financial institutions for each completed transfer.
Parliament is set to vote on the proposals on Thursday (20 September), as Kenyatta looks to implement tax hikes on a number of industries to fund government measures including healthcare and affordable housing, Reuters reported.
In June, the country’s largest operator, Safaricom, declared its opposition to any tax hikes on mobile money transfers.
CFO Sateesh Kamath said the move would slow a drive to reduce cash usage and would effectively impact poorer members of society because they rely on mobile money services due to not having bank accounts.
Kenya is one of the leaders in mobile money and is considered a model example for other nations looking to boost financial inclusion.
Safaricom operates the country’s largest mobile money service, m-Pesa.