Airtel Kenya and Yu Mobile, which own the two mobile money transfer services, last year scrapped charges from their services in a bid to attract more customers. But the minister has cautioned that the tax will still be implemented regardless of their business model, urging them to start putting in place transfer fees.
Meanwhile, there have been concerns over who should bear the burden of the new tax regime, with experts arguing it would be unfair for companies to transfer the extra costs to customers.
Githae has already said the new taxes should be paid by the operators, not the customers, but Safaricom has already announced its prices will reflect the new charges from this Friday and will impact upon users.
Safaricom boss Bob Collymore regretted this move, saying: “We maintain our position that a tax on mobile money is at that this time premature and is likely to have a negative impact on the country's financial deepening agenda by creating an unnecessary barrier for wananchi (citizens) who are most in need of basic financial services.”
The Finance Act of 2012 introduced a 10 percent excise duty tax on transactions for all money transfer services provided by cellular phone providers, banks, money transfer agencies and other financial service providers. The Act contains a raft of tax measures by Treasury aimed at raising revenues for the government to fund growing financial obligations.