Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.


Safaricom warns against more tax rises on M-Pesa

12 September 2013, 19:00

Nairobi - Kenya's leading mobile phone operator Safaricom cautioned the government against further rises in excise duty on mobile money transfers, saying there was a risk new county-level administrations would add to the tax burden.

Chief Executive Bob Collymore said on Thursday further tax increases would put a service that has deepened financial inclusion, particularly in rural areas, beyond the reach of the poor.

The company said in May that a 10 percent tax imposed in late 2012 on transfers using its M-Pesa mobile service had forced it to absorb costs of 400 million shillings in the 2012/13 financial year to shield consumers from the full burden.

"Mobile money is still relatively new and Government should be wary of putting any additional tax burden on the customer, and in particular on the poor who rely on M-Pesa more than any other," Collymore told the company's annual general meeting.

Collymore said more than 28 shillings out of every 100 shillings charged to a telecoms customer went to the taxman, making Kenya's telecoms taxes amongst the highest in the world.

He said he worried that it could rise higher if county governments, which were introduced this year, targeted the telecoms sector to raise revenues.

"This is an industrywide area. We have seen one county which attempted to charge fees for putting fibre (optic cable) on the ground," he said. "We are urging governors and local county governments not to take a short term approach because operators will inevitably deprioritise those counties."

The county governments have been allocated funds from the national budget to pay for projects but will have to meet shortfalls by raising their own revenues.

No government tax officials could immediately be reached to comment on prospects for increases in excise duty.

Safaricom, 40-percent owned by Britain's Vodafone, posted record pretax profits of 25.5 billion shillings last year. M-Pesa accounted for 18 percent of revenue, a share expected to climb to 20 percent within two years.

Mobile money transfers are used by workers in cities to send money to rural families and increasingly are also a means to pay utility bills or buy goods in shops such as groceries.

Collymore said Safaricom was still negotiating access to the 4G spectrum with the telecoms regulator.

Other telecoms operators in Kenya are a unit of India's Bharti Airtel, Essar Telecoms' Yu and Telkom Kenya, owned by France's Orange.

- Reuters


Read News24’s Comments Policy

Comment on this story
1 comment
Comments have been closed for this article.

Read more from our Users

Submitted by
Shakila Alivitsa
4 ways to handle your cheating ma...

He is cheating. How do you handle him?

Submitted by
Shakila Alivitsa
Why do men choose second wives?

Why do men choose to have second wives?

Submitted by
Eugene Odanga
Wizkid set for twin Kenyan shows

Wizkid is back in Kenya. For two shows.

Submitted by
Eugene Odanga
Udada women's festival begins in ...

The Udada women's festival has arrived in Nairobi.

Submitted by
Uhuru pardons 2747 death row conv...

President Uhuru Kenyatta has pardoned a number of death row convicts, sending them to life sentences instead. Read more...

Submitted by
Eugene Odanga
WATCH: Kaka Sungura arrested in t...

Was Kaka Sungura arrested in town?