The Bill proposes an increase in excise duty on fees charged for mobile money transfer services from 15% to 20%.
This increase has been met with significant opposition from stakeholders, who argue that it would raise the cost of mobile money services, adversely affecting small-scale businesses and low-income individuals who rely heavily on these services for financial transactions.
The Bill initially proposed introducing a 16% VAT on money transfer services.
The Departmental Committee on Finance and National Planning recommended maintaining the prevailing excise duty rate of 15% on mobile money services to avoid increasing the financial burden on consumers and to support financial inclusion efforts.
The V.A.T clause has been recommended for deletion by the Departmental Committee on Finance and National Planning. The committee noted that such a tax would discourage the use of mobile money services and drive people towards unregulated cash-based transactions.
The proposal in the Finance Bill to increase the excise duty rate from 15% to 20% on (i) telephone and Internet data, (ii) money transfer services, (iii) betting and gaming, has been dropped and the rate is to remain as 15%.