Safaricom slaps higher M-PESA tariff on customers

The telco says the upward review follows amendments to the Customs and Excise Duty Act gazetted on February 1 last year/FILE

The telco says the upward review follows amendments to the Customs and Excise Duty Act gazetted on February 1 last year/FILE

NAIROBI, Kenya, Feb 1 – Safaricom’s M-PESA customers will from February 8 be charged 10 percent extra for money transfers above Sh101.

The telco says the upward review follows amendments to the Customs and Excise Duty Act gazetted on February 1 last year.

The amendments contained in the Finance Act of 2012, introduced a 10 percent excise duty tax on transaction fees for all money transfer services provided by cellular phone providers, banks, money transfer agencies and other financial service providers.

The Act contains a raft of tax measures by the Treasury aimed at raising revenues for the government to fund growing financial obligations.

“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.

This means that those sending between Sh101 and Sh500 to other M-PESA customers will be charged Sh2.50 more on the current fee of Sh25, while between Sh501 to Sh5,000 will pay Sh33 from the current Sh30 and so on.

However the announcement is against the expectations of many Kenyans who use the service, after Finance Minister Njeru Githae earlier assured that the 10 percent excise duty should be borne by service providers and not customers.

“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 immediately but I do not expect any increase in airtime or the charges to the customer,” Githae said when he announced the new tax measures in 2012, warning that the government would ensure there was no secret adjustments by the service providers.

The new tax measures by the Treasury were taken to raise over Sh40 billion needed to meet wage adjustments in the public sector last year.

All eyes will now be to the rest of the telco firms and other related financial service providers to see if they will follow suit and if the Treasury will react in any way to fulfil its promise of ensuring that customers don’t shoulder the whole burden of the duty increase.

MARGARET WAHITO

MARGARET WAHITO

Margaret has been a business reporter for the past three years. She is currently pursuing a degree in Communications and Public Relations at Moi University. She holds a diploma in film and video production from the Kenya institute of Mass Communications. Apart from journalism, she has interest in community work, especially helping the disadvantaged.

  • mazzdark

    Time to switch..in other news a Mugumo tree in Nyeri has split in 2 during the CORD Rally in Uhuru Park…………..time to switch….

  • Mr Kirui Sam

    Since Safaricom knows that we are highly dependant on this service and most of us cannot do without it, then they can afford to hike since the alternative isnt as reliable and more adopted than mpesa. not fair..

  • sisemikitu

    What did Njeru Githae say in Parliament about the 16% excise duty – that it would not affect consumers!
    Why give such a Portfolio like Finance to daft fellas? Better Masakhalia!

    • http://politikodownunder.au/ peter

      The same daft fella adviced Kenyans to feed on rats to curb hunger.

  • Elijah Odhiambo

    Well we can send money via bahasha like we used to…………………….looking for things to tax is going to kill.

  • LoyalCitizen

    This is consumer exploitation……am rethinking….there are other means of sending money and this step may cause reduction of subscribers… Mr Bob Collymore kindly reconsider….