Approximately Sh332.25 billion in mobile money transactions was conducted across the country in the financial year ending July 2018; data from the Central Bank of Kenya has shown.
Despite the Treasury’s decision to increase excise duty on mobile money transfers to 12 per cent from 10 per cent, only the months of June 2018 and December 2017 have documented more transactions with the pair recording Sh337.11 billion and Sh332.62 billion in dealings respectively.
The increased duty on mobile transactions is expected to finance the Health pillar of the Big 4 Agenda whose aim is to provide every Kenyan with medical covers by 2022 even though a High Court ruling issued in July suspended the tax and deemed it illegal.
The ruling was issued after the court of law determined that Treasury Cabinet Secretary Henry Rotich sanctioned the implementation of the levy weeks before the National Assembly approved to the Finance Bill 2018 and subsequently forwarded it to President Uhuru Kenyatta for signing.
New tax rates on bank cash transfers and increments on call and data services are expected to generate Sh20.2 billion that will also be used by the government to fund the affordable Healthcare agenda.
The use of mobile payments has skyrocketed in the past five years with numerous sectors of the economy introducing mobile payments into their businesses.
Approximately Sh3.4 trillion in mobile payments was transacted last year. The amount represented 46.95 per cent of Kenya’s Gross Domestic Product which stood at Sh7.75 trillion in December 2017.