Airtime and Mobile Money Transfer

Airtime and Mobile Money Transfer Services

Excise Duty on Mobile Money Services:

• 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​​.

Value-Added Tax (VAT) on Money Transfer Services:

• The Bill initially proposed introducing a 16% VAT on money transfer services. 

Committee recommendations 

• 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​​.

Changes from the 18th June meeting

• 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%.