Kenya – rise in mobile transaction fees looms

A new report published this week says that mobile money transaction costs are expected to rise by 10 percent in Kenya after the country’s Treasury has made a series of moves to levy taxes on the enterprise.

Kenyans may have to pay more to use mobile money transaction services. (Image: google/intomobile.com)

Kenyans are frustrated at the announcement and have urged the government to reconsider the transfer service costs in order to enable users to continue to benefit from the growth of  mobile money technology services. 

According to a Standard Media report, Kenya’s central government believes it can earn some Sh4.5 billion from mobile transfer transactions and believes that as voice revenues take a hit, mobile money can alleviate what it says is a cash pitfall.

However Finance Minister Njeru Githae has repeatedly said that money transfer services will “meet the new expenses and not [be] passed on to consumers.”

The report suggested otherwise, saying the Treasury is pushing for the transfer tax to be implemented.

Analysts have stated that the new measures could be a boon for the mobile money sector. This is because more Kenyans are using the system as it is cheaper and easier than traditional bank-to-bank methods.

“This sector is the fastest growing and so the taxman should also get his bite. I expect this measure to generate close to Sh4.5 billion immediately, but I do not expect any increase in airtime or the charges to the customer. This tax is payable by the service providers; not the customer,” said Githae on Friday.

The goal, he said, was to improve the overall make- up of the mobile money sector to bring it in line with banking regulations in Kenya, but added that he did not expect additional costs to be put on the customer.

Mohammad Awad