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New taxes push Kenyans to pay more for Safaricom calls, SMS.

Safaricom subscribers will have to dig deeper into their pockets to get call services.

The mobile phone company announced it has increased its call services by 30 cents and SMS services by 10 cents.

CEO Bob Collymore on Wednesday said the increase is caused by the implementation of the 8 per cent VAT on petroleum products.

"Therefore, as a result of the increased taxes passed in the Finance Act 2018, we wish to notify our customers that from midnight tonight, the 18th October 2018, our headline price for voice calls and data will increase by 30 cents and SMS by 10 cents," Collymore said in a statement.

He said the company has also reviewed prices for mobile data bundles, Fibre-To-The-Building (FTTB) and Fibre-To-The-Home (FTTH) to effect the new 15% Excise Duty tax on internet services.

"The full tariff guide has been filed with Communications Authority of Kenya as required by law and is available from our website, USSD, and all our customer touch points," Collymore said.

"We are aware of and regret the impact these additional taxes on our customers. It is our sincere hope that these changes will not affect the remarkable gains we have made in mobile phone and internet penetration in Kenya over the last two decades."

The Safaricom boss said while they remain committed to delivering great value to Kenyans, recent changes to taxes affecting their services were passed through the Finance Act 2018.

In particular, he said the Excise Duty tax applicable on Voice, SMS and Data services was increased from 10 per cent to 15 per cent.

"This is in addition to the prevailing VAT applicable to mobile services at the rate of 16 per cent. We have since then been undertaking extensive engagement with the government on the impact, timing and exact nature of services that these taxes will affect," he said.

In July, the government increased the excise duty on mobile money transfers by 2 per cent, making it 12 percent.

Treasury Cabinet Secretary Henry Rotich, in the budget estimates, stated that the money that will be collected from the increment will be used to finance the Universal Health Care programme.

Safaricom later adjusted M-Pesa tariffs on the basis of Finance Bill, 2018 effective July 1.

The news charges were between Sh 1 and Sh3 higher.

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Publication:The Star (Nairobi, Kenya)
Date:Oct 17, 2018
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