Safaricom PLC and other mobile money operators have reviewed their charges following the enactment of the Finance Act 2023. As a result, M-PESA mobile transfer charges have increased from 12% to 15%.
In contrast, the excise duty rate for calls, SMS, and Internet services has decreased from 20% to 15%.
“We will be reviewing our calls, SMS, data, fibre, and M-PESA pricing to reflect the increase in Excise duty rates on fees charged on mobile money transfer services from 12 per cent to 15 per cent and the decrease in the Excise duty rate on telecommunications services from 20 per cent to 15 per cent,” Safaricom said.
New M-Pesa Rates
|MINIMUM||MAXIMUM||TRANSFER TO M-PESA USERS||TRANSFER TO UNREGISTERED M-PESA USERS||WITHDRAWAL FROM AGENT|
The Finance Act came into effect Friday when the Court of Appeal lifted a conservatory order by the High Court blocking the Act’s implementation.
This change is expected to benefit consumers by reducing the cost of these services. However, it remains to be seen how these changes will impact the mobile money market in the long term.
Stephen Chege, Group Chief Officer for Regulatory & External Affairs at Vodacom Group says government tax policies pose a significant challenge to the sustainability of mobile money services and financial inclusion gains made by these innovations.
“While these taxes are targeting mobile transactions because of their high volume, it is important to remember that the value per transaction is typically quite low,” says Chege.
“This means that taxation on mobile money transactions is unlikely to significantly expand the tax base and could result in the reduction of tax revenue in the future, ” adds Chege.