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What Uhuru’s surprise taxes mean to you

By Dorcus Osongo | Published Wed, September 19th 2018 at 16:00, Updated September 19th 2018 at 16:18 GMT +3
An Mpesa promotion: President Uhuru Kenyatta's new taxes seen as hurting money transfers. [Archive, Standard]

Hard times are ahead for Kenyans if the MPs support some aspects of President Uhuru Kenyatta’s alterations of Finance Bill, 2018 sent back Parliament for reconsideration on Thursday.

The President has proposed an increase in mobile phone transaction excise duty from 10 percent to 20 percent. He also wants excise duty on bank transactions hiked from 12 to 20 percent. If he has his way, Excise duty on telephone and internet data goes up by 15 percent.

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Ironically corporate tax betting has been slashed from 35 to 15 percent at a time when the interior ministry is cracking down on slot machine gambling across the country.

 During the 2018 World Cup, CNN reported Kenya was betting champ in Sub-Saharan Africa.

 Cases have even been reported of students losing their school fees in betting platforms.

In 2016 a university student hanged himself behind his mother’s in Migori after losing 80,000 in football bets.  His suicide note said he had squandered the money he was given for college fees in betting and saw no need of living.

If the President’s memo is approved, it will increase the excise duty on telephone, internet data and mobile phone services which will affect businesses adversely. Those involved in businesses that utilise money mobile transfer services will pay more for the transfers.

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On-line business such as Vlogging, online writing, e-commerce stores, telemarketing and blogging will be greatly affected by an increase in excise duty on telephone and internet data.

Some quarters argue it would have been wise to increase the excise duty on betting while reducing it on mobile telephony, internet data and money transfers.

Mobile money transfer accessibility has helped to grow many businesses as transactions are done on the cheap and quickly.

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 There is a near-consensus that, as much as the president wants to seal the loopholes of low revenues,  the tax increases are going to largely affect small businesses  that depend on internet and mobile money transfer.

This memorandum also seeks to introduce an adulteration levy to harmonise the price of kerosene with that of diesel.  This will deal a huge blow to unscrupulous traders who add the lower rated kerosene to diesel and still sell at the price of diesel making a killing. The same happens when petrol is adulterated with kerosene.


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