In a memorandum to Parliament rejecting the suspension of fuel levy, President Uhuru Kenyatta has proposed an increase in the tax on calls, data and mobile money transfer as he seeks to fill the budget deficit.
The tax on telephone calls and data shall be increased from 10 to 15 percent. The cost of bundles and telephone calls is thus likely to go up.
“Telephone and internet data services shall be charged excise duty at a rate of 15 percent of their excisable value,” read the new proposal.
More to that, the levy charged for sending money via mobile phones will go up from 12 to 20 percent of the chargeable value.
“Excise duty on fees charged for money transfer services by banks, money transfer agencies, and other financial service providers shall be 20 percent of their excisable value,” he added.
In July, Treasury Cabinet Secretary Henry Rotich increased the levy to 12 percent which triggered telcos to increase charges.
In an address to Parliament on July 1, 2018, he revealed that this particular levy was to be used in funding Universal Healthcare Coverage.
The government has defended this move by claiming that it will spread the burden on taxation over a majority of Kenyans.
The biggest beneficiaries of the memorandum are betting companies and lotteries who will receive a relief after reduction of their tax from 35 tax to 15 percent.
However, the winners of games and bets will suffer a 20 percent tax on their prizes.
