A new amendment to Kenya’s Finance Act of 2018 attempted to raise the tax rate on telephone and internet services from 15% to 20%.
Because a huge majority of Kenyans use their phones for both internet access and communication via SMS and phone calls, the amendment has been met with opposition since its initial introduction.
In addition, numerous innovative mobile services have recently been adopted in the country.
New mobile services such as driver’s license applications, land transfers, parking payments, and other licensing platforms, to name a few, will see greater taxes through usage.
With approximately 41 million mobile data subscriptions, Kenya is known for its highly connected population.
The Finance Bill amendments are perceived as the government actively looking to discover services it can tax in order to increase its earnings at a time when many Kenyans are struggling to make ends meet owing to the COVID-19 outbreak that is wreaking havoc on the country.
The additional taxes are expected to have a negative impact on the growth of mobile phones and internet penetration.
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