Kenyan Banks Begin Implementing 20 Percent Increase on Transaction Fees

Kenyan banks have began implementing the increased taxes imposed on cash transactions through the Finance Act 2018.

Some lenders have informed their customers that the changes took effect on Tuesday, days after President Kenyatta signed the Finance Bill into law.

“Dear Customer, effective today 25/9/18 and in line with the Finance Act 2018, Excise Duty charged on all bank transaction fees has increased from 10% to 20%,” read a notification sent to customers by Kenya Commercial Bank (KCB).

The new law requires cost of bank charges including ATM, account fees and over-the-counter withdrawals be doubled from 10 percent to 20 percent.

“Dear customer, to avoid service interruption as from 6pm today, kindly update your Mcoopcash Android application immediately,” read a message from Cooperative Bank of Kenya to its customers.

Equity Bank has also implemented the levy and has updated terms and conditions on its mobile App.

Mobile money service providers will also implement the levy in line with the Act by increasing charges on transactions through the platforms from 12 to 20 percent.

“Excise duty on fees charged for money transfer services by banks, money transfer agencies and other financial service providers shall be 20 per cent of their excisable value,” the Finance Act states.