Airtel Kenya has received a warning from the finance ministry over its promotion of free mobile money transfers in the country. It comes as the country’s authorities look to place a ten percent tariff on all money transfers conducted through mobile phones.
The country’s Finance Minister Njeru Githae cautioned the telecom operator over the offer, saying that “this may be a way to avoid paying taxes on the transactions.”
Githae said that if the firm persists on promoting the offer, “the Treasury would set a minimum transaction fee.”
The minister also told all the mobile service providers “to ensure they pay taxes on their offers, such as free talk time, as this may be a way to avoid tax remittances for the services.”
Kenyans are frustrated at the announcement, and have urged the government to reconsider the transfer service costs in order to allow users to maintain their ability to be cashless, as mobile money continues to play an increasingly important role within the telecommunications sector.
According to a Standard Media report, the Kenyan 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 describes as a cash pitfall.