Court Suspends Proposed 2% Tax on Mobile Money

Kenyans have been relieved of the burden of paying more for mobile money transfer after the High Court suspended the implementation of new taxes imposed under the Finance Bill 2018.

Justice Wilfrida Okwany issued the directive saying there will be no practical way of compensating Kenyan taxpayers who would have already been affected by the implementation of the new taxes.

“I am satisfied that from the material placed before me, the petitioner has made out a prima facie case with a likelihood of success and I find that it is necessary to grant conservatory orders to preserve the subject matter of the suit while awaiting final determination of the constitutionality of the Finance Bill 2018,” ruled Justice Okwany.

The judge issued the directive in a case in which activist Okiya Omtatah challenged the implementation of the new tax measures under the Finance Bill.

According to Omtata, his move to court was to protect Kenyans from exposure to taxes which have not been approved by Parliament, contrary to Article 210 (1) of the Constitution.

Omtata added that the Finance Bill plans to introduce a number of amendments to the tax regime to mobilize revenues to finance the Government’s budget of some Ksh.3trillion.

“This matter is urgent because the respondent has begun implementing or imposing taxes proposed in the Finance Bill 2018 before the same is considered and approved by the National Assembly,” he said.

Telecommunication companies like Safaricom had already increased the cost of sending money through mobile phones following a proposed two percent increase on excise duty charged on service providers.

Service providers had already passed on the burden brought by the 12 percent tax to customers.

When Rotich introduced a 10 percent excise duty on the service, leading mobile money provider Safaricom increased the charges on money transfers by 10 percent.