This comes after President Mwai Kibaki signed the Finance Act of 2012 among other 30 bills. As a result Safaricom on Friday reviewed its rates to its M-Pesa users which are expected to be effective by February 8.
Users will now pay more to send and receive money, a move that is a retaliatory to the new measures by the government to tax the thriving business of close to 16 million active users.
The Mobile Operator however said that transactions below Kshs 100 remain unchanged while the rest shall attract an increment on 10 percent.
Kenyan government introduced a 10 per cent excise duty tax on transaction fees charged on money transfer services by cellular phone providers, banks, money transfer agencies in an effort to grow its revenues which was contained in the Finance Act of 2012 signed in to law by President Kibaki before the closure of the 10th Parliament.
According to the Safaricom Chief Executive Officer Bob Collymore the latest increment was necessary in order to protect the service from being negatively impacted by the tax hence forcing the mobile telecommunication network passing on the burden to the consumer.
M-Pesa Users will pay Kshs 3 more above the kshs 30 they are charged to send money to other registered M-Pesa Users on amount ranging between Kshs 501 to Kshs 5,000 while those withdrawing money from M-Pesa Agents will part with an additional Kshs. 2.50 as opposed to the current Kshs 25 hence paying up to Kshs 27.50 to withdraw amount ranging from Kshs 101 and Kshs 2,500, the rates will also apply to transactions involving unregistered users.
Earlier this week, Chimpreports had reported, ‘Despite the mobile money transfer currently not taxed they have given Kenyans a better opportunity to access to banking services which include paperless banking, instant bank account remittances and non- collateral loaning services.’
Close to 70 percent of Kenyans use Mobile money transfers to remit money to their families which has led to creation of jobs, access to loaning services and conducting paperless Banking services which come as a result of corporate partnership with the mobile telecoms companies.
Other companies such as Airtel Kenya who operate the Airtel Money and ESSR Telecoms YU who have been encouraging their users to send money for free are expected to follow suit alongside Safaricom. Orange Money also is expected to adjust its rates.