By using this site, you agree to the Privacy Policy and Terms of Use.
Accept
Newsunplug KenyaNewsunplug KenyaNewsunplug Kenya
  • News
    • Metro
    • Politics
    • Business
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
Reading: Cost of sending mobile money up, bank transfers to fall
Share
Notification Show More
Font ResizerAa
Newsunplug KenyaNewsunplug Kenya
Font ResizerAa
  • News
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
  • News
    • Metro
    • Politics
    • Business
  • Entertainment
  • Lifestyle
  • Sports
  • Tech
  • Spotify
Have an existing account? Sign In
Follow US
© 2022 Foxiz News Network. Ruby Design Company. All Rights Reserved.
Newsunplug Kenya > Blog > Business > Cost of sending mobile money up, bank transfers to fall
Business

Cost of sending mobile money up, bank transfers to fall

hallanaija
Last updated: May 5, 2023 7:22 am
hallanaija 2 years ago
Share
fuliza money
SHARE

The cost of sending money through mobile services such as Safaricom’s M-Pesa looks set to increase while charges for bank transfers are expected to fall with a review of taxes.

The proposed changes contained in the Finance Bill seek to raise the excise duty on money transfer services by telcos from 12 percent to 15 percent in a move that will push prices upwards.

President William Ruto’s administration is, however, seeking to lower the excise duty on fees charged for money transfer services by banks from 20 percent to 15 percent and cut the cost of telephone and Internet data by the same rates.

The cost of bank transfers rose last year following the lapse of a waiver that the Central Bank of Kenya had put in place from March 2020 in a bid to encourage cashless transactions following the outbreak of Covid-19.

The reintroduced rates are lower by up to 61 percent from what was in place before the pandemic.

Safaricom, whose M-Pesa accounts for more than 90 percent of the mobile money market, has in recent years unsuccessfully opposed the government’s efforts to increase excise tax on mobile money transfers, saying it would hurt the poor who rely on the platform.

READ MORE  Jubilee to spend Sh2.25bn on robots in digital drive

The telco cut charges on M-Pesa-to-bank transactions by a range of between 23 percent and 100 percent from January to widen financial inclusion.

M-Pesa customers transferring cash from the range of Sh20,001 to Sh150,000 are paying Sh12, a 46.4 percent cut from the previous Sh22.4, while those doing M-Pesa-to-bank transfers pay Sh4 for amounts between Sh101 and Sh500, an 82.6 percent decline from Sh23.

fuliza money

“By deleting the words ‘shall be 12 percent’ appearing in paragraph three and substituting therefor the words ‘or payment service provides licensed under the National Payment System Act, 2011, shall be 15 percent’,” says the Bill.

This will be the second increase in the excise duty on mobile transfers in four years. The tax was increased from 10 percent to 12 percent four years ago.

Increasing mobile money transfers looks set to net a vast majority of Kenyans, with the Communications Authority of Kenya data showing 38.65 million were registered mobile money customers by the end of December.

The State is targeting products like mobile money that are consumed by millions of Kenyans in an attempt spread the burden of taxation.

READ MORE  KenGen will bring 42.5 MW of solar power to the Seven Forks area.

Safaricom’s M-Pesa transacted Sh29.55 trillion in the financial year that ended March 2022 as the platform averaged 2,000 transactions per second.

The State had in 2018 raised excise duty on fees charged for mobile money transfer services from 10 percent to the current 12 percent. Previous attempts to raise this to 20 percent flopped.

A previous increase in excise duty on mobile money transfers had prompted Safaricom to pass the burden to customers.

The telco in 2012, when excise duty was first introduced on mobile money, raised tariffs for transactions above Sh101 by 10 percent but left unchanged charges for transactions valued at below Sh100.

Safaricom in 2018 increased mobile money transfer charges for transactions above Sh101 by 10 percent but left unchanged fees for dealings valued at below Sh100 after a raise of excise duty.

You Might Also Like

EAC Delegation Visits ECOWAS Commission On A Benchmarking Mission

CBK avoids interventions to prop up Kenya shilling

Mediheal Hospital Staff At Eldoret Protest Unpaid Salaries

KCB Group now corrects NSSF shareholding

Three-Judge Bench Begins Hearing Case Challenging SHIF

Share This Article
Facebook Twitter Email Print
Previous Article kimathi Mukami, widow of Mau Mau fighter Dedan Kimathi, dies in Nairobi
Next Article Exhume Kimathi’s Body For Joint Burial With Widow: Moses Kuria
Leave a Comment

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

about us

We influence 20 million users and is the number one business and technology news network on the planet.

Recent Posts

  • Paris Saint-Germain beats Real Madrid in the race to sign the precious gem!
  • Sakaja defends clampdown on property owners over unpaid land rates
  • Man Utd captain Fernandes rejects Al-Hilal move
  • GG Kariuki’s widow Gladys Wairimu dies at 80
  • Rose Njeri released on Ksh.100,000 bond

Recent Comments

No comments to show.
Newsunplug KenyaNewsunplug Kenya
© Newsunplug Kenya. All Rights Reserved.
Welcome Back!

Sign in to your account

Username or Email Address
Password

Lost your password?