NAIROBI, Kenya, April 4 – Central Bank of Kenya (CBK) Governor Kamau Thugge says that the delinkage of Safaricom from M-Pesa faces a tax liability hurdle of about Sh75 billion that has slowed the process.
Thugge, during CBK’s Monetary Policy Committee briefing Thursday, stated that despite the setbacks, the monetary regulator is committed to seeing the success of the separation.
”We believe that there should be a separation and that Central bank should oversight M-Pesa and therefore we will continue to engage Treasury and Safaricom to see how quickly this separation should be done,” he said
In December last year, the governor confirmed that there have been complications in terms of the amount of tax to be paid for the severance.
Earlier, Safaricom, which runs the mobile money transfer services, was opposed to the transfer because it would present an array of shortcomings.
It argued that higher transaction costs for users would result from the split, placing the subsidiary business and those held by other comparable service providers at a competitive disadvantage.
It also cited the Finance Act currently in place as a huge stumbling block, which in essence lowers the excise duty on bank transactions from 20 percent to 15 percent, as well as scaling up the mobile money transfer levy to 15 percent, up from 12 percent previously.
