Kenyan Gov't to Impose Increased Taxes on Mobile, Bank Cash Transfers

The government is set to impose increased taxes in mobile money service in the coming financial year in a proposal by Treasury Cabinet Secretary Henry Rotich in the Sh3.074 Trillion 2018/2019 budget.

While reading the budget statement in Parliament on Thursday, Rotich proposed to increase excise duty on mobile cash transfer services from 10% to 12%. The Cabinet Secretary said the amount collected will be channeled towards funding President Uhuru's universal healthcare programme.

Rotich further proposed a tax of 0.05 % on cash transfers of more than Sh 500,000 between banks and other financial institutions.

“Our economy has a well established financial sector in the region with significant sums of money transferred monthly. In order for the government to get a fair share of revenue from these financial activities and to finance critical government programmes.

"I propose to introduce a robin hood tax of 0.05% of any amount of ksh500,00 or more transferred through banks and other financial institutions,” said Rotich.

“The revenue realised from these measures shall be used to fund universal healthcare.”

The 2018/2019 budget of Sh3.074 Trillion increased by 10.83 percent from the Sh2.77 Trillion budget in the 2017/2018 financial year.

Kenyans planning to import private cars exceeding a fuel capacity of 2500cc for diesel and 3000 cc for petrol should also brace themselves for higher taxes. The CS proposed to increase the excise duty from 20% to 30% for importing such vehicles.

Betting, lottery and gaming companies will be forced to pay a 20%  penalty and 2% interest for delay in payment of taxes.

“This will enhance the collection of these taxes that are meant to support sports, arts, cultural and social development activities in our country,” said Rotich.