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Uhuru Proposes Tax Hike On Money Transfer Services

Kenya’s president has proposed hiking taxes on mobile money transfer services and other money transfer services, documents sent to parliament this month showed, amid a tussle in government over how to boost revenues without hurting the poor.

Uhuru Kenyatta proposed increasing the excise duty on mobile money transfer fees from 10 percent to 12 percent, documents reviewed by Reuters showed. Parliament is set to debate and vote on the measure on Thursday.

The latest proposal comes as Kenyatta, re-elected last year after an extended and bloody election, seeks to implement planned tax hikes and other measures in this year’s budget that were designed to fund a range of government development goals including universal healthcare and affordable housing.

Lawmakers and some members of the public have resisted the measures, particularly a new tax on petroleum products. Kenyatta said on Friday the tax is necessary, but that he wanted to cut it to 8 percent from 16 percent.

Kenya’s biggest mobile phone operator Safaricom said in June it is opposed to a proposed tax rise on mobile phone-based transfers, arguing that it would likely mostly hurt the poor, most of whom do not have bank accounts and rely on mobile transfer services such as Safaricom’s M-Pesa.

Reuters

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