Bob Collymore: Kenya’s telecoms sector taxes among the highest globally


 

A lady talks on her mobile phone.
A lady talks on her mobile phone.

Safaricom CEO Bob Collymore recently added his voice to the debate about the increased taxes on Kenya’s telecoms services, brought about by the VAT Bill which was passed into law on August 6, 2013 and assented to by President Uhuru Kenyatta on August 14, 2013.

The VAT Bill has subsequently re-introduced the 16 percent tax on ICT equipment after it was scrapped in 2009 by Uhuru Kenyatta who was then the country’s finance minister.

Speaking at the firm’s AGM on Thursday September 13, 2013 at Bomas of Kenya, Collymore said: “We need to acknowledge that taxation in the telecommunication sector is amongst the highest in the world with more that Kshs 28 of every Kshs 100 that the customer spends going to tax.  The past year has seen the taxation net spreading to mobile money transactions.”

Collymore noted that despite the international accolades Kenya receives for the success of M-Pesa, mobile money is “still relatively new” and the “Kenya government should be vary of putting any additional tax burden on the customer, and in particular on the poor who rely on M-Pesa more than any other.”

He added that Safaricom recognizes that the government is faced with a number of revenue challenges over the next few years, adding that the firm would continue to make its contribution to the development agenda of Kenya as a major corporate taxpayer.

Collymore also called on County Governments not to levy new taxes on telecoms investors who come to their counties.

“We would also urge County Governments to resist the temptation to levy new fees on telecommunications infrastructure as this will inevitably result in mobile operators de-prioritising these counties,” he said.

Apart from Safaricom, other industry players including device as well as infrastructure vendors have also opposed the new taxes on ICT equipment.