Safaricom is looking at ways of reducing M-Pesa transaction fees after the Kenya Bankers Association (KBA) was granted an injunction temporarily stopping the Kenya Revenue Authority’s (KRA) taxation of mobile money.
Last week, the KBA was granted an injunction stopping the KRA from charging excise duty on mobile money transactions by banks and service providers until the case scheduled for hearing on March 18 is heard.
Safaricom’s corporate affairs director, Nzioka Waita, told The Star Newspaper that, with the court process initiated, the telco is now looking into ways to see how the transaction fees could be reverted back to their original levels.
“We are of course following this matter very keenly and have sought independent legal and tax advice before taking any action of our own,” Waita said. “The ruling does not delve into the substance of the suit per se, but recognises that there are important legal issues to be addressed at the full hearing.”
“We do however recognise that the new tax imposes a significant burden on the consumer and as we seek clarity on the new law we shall explore all possibilities at our disposal to mitigate this burden,” Waita added.
Safaricom was forced to hike M-Pesa transaction fees by 10 per cent after Kenya’s Finance Minister, Njeru Githae, pioneered amendments to the Customs & Excise Duty Act in a bid to raise more revenue for the Kenyan government. This was to cater for the budget deficits arising from civil servants’ salary increments.
The 10 per cent excise duty was meant to earn the government an extra KSh4.5 billion (US$52 million), raised from all mobile money transactions by mobile phone service providers, banks and all other money transfer agencies.
