The government will impose a tax on airtime offered by employers to Kenyan workers beginning August 1, 2018.
The Standard reports that the tax will also apply to allowances offered to employees such as housing, meals and cars.
"If you receive airtime that is above Ksh3,000, that will be taxed," a Kenya Revenue Authority (KRA) official told the paper.
The government will also take up 12.7% of every mobile money transfer transaction, a move that will affect ordinary Kenyans who are the major users of the service.
[caption caption="A user displays the M-pesa menu on his mobile phone"]
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The official explained that airtime is one of the key taxable "non-cash benefits" and every allowance that will exceed the Ksh3,000 mark will be taxed.
On cars, the employer will be taxed according to the engine size of the vehicle as long as the vehicle is used for company business. Personal use vehicles will not be taxed.
This comes in the wake of increased excise duty on beer, cigarettes, fruit juices, bottled water, and motorcycles.
Tax on cigarettes and motorcycles takes the highest jump at 5.2% increase while water and non-alcoholic drinks at 4% increase and fruit juices and alcoholic drinks at a 5% increase.
"This change is effective August 1, 2018, and it applies to the above excisable products delivered from manufacturing facilities from that date.
"In addition, all imports of excisable goods cleared for home use from that date shall attract new excise duty rates," a memo by PricewaterhouseCoopers to its clients read in part.
The memo further outlines that the increased and new taxes will not apply to petroleum products.
"Petroleum products, which also attract excise duty at specific rates, have not been affected by the adjustment. This could be due to the anticipated increase in price due to the introduction of VAT in September 2018 with the expiry of the transitional VAT exemption," the memo stated.
[caption caption="Treasury CS Henry Rotich speaks during a past press address"]
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