Bankers Challenge Gov't Plan to Impose Tax on Kenyans Making Huge Transactions

Bankers have moved to court to challenge plans to increase tax on transactions of more than Sh500,000 as proposed by National Treasury Cabinet Secretary Henry Rotich.

The Kenya Bankers Association (KBA) filed a case on Monday challenging the proposed introduction of 0.05 percent excise duty tax on transactions above half a million shillings.

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

The association argues the law is vague on the implementation framework and requires more guidelines to effect the same. The bankers lobby group further says that there was no public participation in relation to the introduction of the new excise duty.

“There is ambiguity and lack of clarity. Terms in which the duty is imposed in that there is no definition of what constitutes “money transferred by banks,” KBA said in its petition.

“A conservatory order be issued to delay the implementation of the excise duty introduced by the finance Bill 2018 until such time allowed for alteration of the computer systems operated by the banks to implement the charge of the duty,” reads court documents filed by KBA.

“The implementation of the duty will require changes to the computer programs of all members of the bankers association which cannot be done in this limited time,” reads court papers.

CS Rotich also announced an increased excise duty fees charged on mobile cash transactions from 10 percent to 12 percent as part of the ‘Robin Hood’ tax.