Mobile phone subscribers will now have to pay more for money transfer transactions following the gazettement of a law allowing taxation.
Subscribers will now pay 10 per cent more for M-Pesa and transactions worth more than Sh101 effective Friday 8.
This follows the publication of the law introducing a 10 per cent excise duty on transaction fees for all money transfer services provided by mobile phone providers, commercial banks and money transfer companies.
Safaricom chief executive officer Bob Collymore, said the move is premature as it could dent efforts to deepen financial inclusion in the country.
“We appreciate the need to support government as it seeks to reach its financial obligations. However, 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 who are most in need of basic financial services,” Mr Collymore said in a statement Friday.
The amendments allowing for the introduction of the tax are contained in the Finance Act of 2012 in a move that is likely to push up the cost of mobile money transactions as the government seeks to earn additional revenue to meet its budgetary obligations.
Safaricom, which has over 16 million subscribers to its M-Pesa money transfer platform, is poised to be the hardest hit as it accounts for the largest mobile money transfers in the country.
M-Pesa revenues in the first half period ending September 30 last year stood at Sh10.4billion.
Other players to be affected include Airtel Money, yuCash, Orange Money, and money transfer companies including Tangaza Pesa and MobiKash.