VENTURES AFRICA – Kenya-based telecom operator Safaricom announced it would on February 8 begin charging extra 10 percent for mobile money transfers above Sh101 ($1.15) on M-PESA.
The decision to increase its charges was influenced by amendments to the country’s Customs and Excise Duty Act which requires mobile telecom service providers, banks, money transfer agencies and other financial service providers to pay an increased 10 percent excise duty tax on transaction fees for all money transfer services.
According to Capital fm, the move by the government is to help generate over Sh40 billion ($456 million) needed to meet wage increment in the public sector in the previous year.
“Our M-PESA tariff structure is guided by our understanding that we need to sustain the robustness and availability of this money transfer services across the country. It also ensures that we continuously invest in our platform and extensive distribution network,” Safaricom CEO Bob Collymore said in a statement.
The Kenyan general public has expressed dissatisfaction with the increased charge as the country’s Finance Minister Njeru Githae had stated that the 10 percent excise duty should be borne by service providers and not customers.
When the tax increment was announced in 2012, Githae said: “This sector is the fastest growing and so the taxman should also get his bite. I expect this measure to give me close to Sh4.5 billion ($46 million) immediately but I do not expect any increase in airtime or the charges to the customer.”
He assured that the government would check adjustments by service providers to pass the burden of the levy to the public.