The Kenyan government has given mobile operators Airtel and Essar telecom (Yu) two months to start charging for their money transfer services.
This call has come days after treasury gazetted a 10% tax on mobile money transfer services in the country.
The decision to tax the service comes as government seeks to increase its revenue avenues as part of plans to raise receipts to meet a ballooning wage bill.
The government is targeting to raise at least Sh2.5 billion from these taxes.
Both Airtel and Yu have not been charging their customers for mobile money transfer in a marketing move aimed at netting more subscribers to their network. Mobile operator Safaricom dominates Kenya’s mobile market with an estimated 80% according to the country’s telecommunications regulator.
Currently Safaricom has the lion share at 16 million out of the 19.5 million users in the country with the transfer market, earning Sh10.4 billion from fees in the six months to September 2012 according to data from the company.
Safaricom introduced a 10% rise in its mobile money charges over the last week, following the implementation of the government tax.
Subsequently, the Kenya’s finance minister, Njeru Githae, has warned Airtel and Yu operators that failure to introduce money transfer charges could automatically attract a charge for any transactions made by a customer.
“Free markets are just gimmicks and cannot last. It is no longer sustainable and from the trend, the operators now know that Kenyans are aware of that,”said Githae during a press conference.
Share