Kenya raises Internet, mobile money and money transfer taxes

On Thursday, September 20, Parliament in Kenya passed the Finance Bill 2018, which included the recommendations of President Uhuru Kenyatta, introducing several new significant tax increases which is in addition to the recent 8% value added tax (VAT) to be charged on petroleum products including fuel.  New taxes include:

  • Excise duties on mobile transactions (such as mobile money transfers) increases from 12% to 20%
  • Excise duties on bank transactions will increase from 10% to 20%
  • Excise duties on telephone and internet data services at a rate of 15%

This tax increase marks the second in as little as 3 months. As recently as July 1, the Treasury sectretary increased the mobile transactions fees from 10% o 12%, which prompted Safaricom to increase its fees related to M-Pesa.

Rationales offered for these new, substantial tax increases include the Kenyatta's effort to further his "Big Four Acton Plan" designed to provide affordable housing, affordable healthcare, food security and manufacturing. 

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