President Uhuru Kenyatta has proposed an internet tax as part of the amendments of the country’s Finance Act, shocking many Kenyans.
The tax will be charged at 15 per cent and will also apply to telephone services, which was previously taxed at 10 per cent.
“Telephone and internet data services shall be charged excise duty at a rate of 15 per cent of their excisable value,” reads the proposal.
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The amendment also includes an increased tax on all money transfer services from the previous 10 per cent to 20 per cent. This tax will affect money transfer via mobile, banks, agencies and other financial service providers.
The move has shocked many across Kenya, where 52 per cent of the population can access the internet as of 2016 according to the GSM Association. Kenya is among African nations with cheap internet services, but the new levy will see the cost going up.
Many have questioned the move since the government has been, for the longest time, encouraging internet use with an online training program that enabled Kenyans to find employment and earn some money. It has also been encouraging Kenyans to use online government platforms such as e-Citizen to conduct vital services such as the application for identity cards, driving licenses and passports, among others.
Kenya now joins Uganda, Zambia and Benin as the leading African countries to tax internet services.
In Uganda, citizens are required to pay a daily USH 200 (less than a dollar) for using social media and a one per cent levy on mobile money.
In Zambia, the tax has been levied on internet calls at $0.03 a day.
In Benin, people will be taxed 5 CFA francs ($0.008) per megabyte used through social media apps, and another 5% levy on texting and calls.
It is now up to the Kenyan Parliament to approve the proposal and send it back to President Kenyatta for assent.
Here’s how Kenyans reacted:
President Ushuru recommends revision of Mobile phone transaction excise duty to 20% from 10%,
Bank transaction 20% &
Phone, Internet tax 15%.And we were laughing at Uganda the other day! Truth is KENYA IS HEADED SOUTH,Very Fast!?#uhuru #tax pic.twitter.com/lvPd81lq8O
— Kriss Gitau (@NjorogeGitau) September 19, 2018
with Uhuru proposals on the finance bill,Kenyans better brace themselves for tougher times.Imagine tax on internet,cashless transaction(read mpesa), fuel and betting…this desperation will get even better,as strategist i don't see this coming to an end any time soon.
— brian walaga (@BrianWalaga) September 19, 2018
@UKenyatta @NziokaWaita why reduce tax on betting from 35% a sector which is not productive or job creating and increase taxes on internet, money transfers basic salaries which increases cost of business and reduces purchasing power of the workers? Creativity lacking at treasury
— EWMagira (@EMagira) September 19, 2018
Internet Tax is coming to Kenya???? .There is no hope for the youth.
— izzyhassan (@izzyhassan1) September 19, 2018
Ajira Kenya was to encourage youth to work online . Working online you need internet penetration, why tax the internet. @MoICTKenya ridiculous
— sally (@Salomelugard) September 19, 2018
In a world where internet businesses can be operated remotely, employ and sell with no geographic limitations, is incorporating in tax havens truly something to be shaun upon? ?
— Nicolas? (@ndethore) September 19, 2018
Uhuru wants to tax internet, increase mobile /bank transaction charges, increase gambling taxation.doing all this he's only creating new jobs for Chinese and rejected Jubilee politicians, where will we get all this money to pay Uhuru?? Are we working in USA and living in Kenya?
— Peter CFC ?? (@petercfc57) September 19, 2018
Kenyans laughed at Uganda when Museveni introduced Internet tax and now its our reckoning. Uhuru blatantly planning to tax Data Bundles. Its hard being born in this part of the world. Suffocating Governance Mediocrity
— odindo otieno (@GilbertNicholar) September 19, 2018
Internet will be taxed. That's why 45 more mouthpieces were hired to spread the cost. Handshake is the worst thing ever happened to Kenyans. Paying those who are not in government monthly requires extra taxes from poor Kenyans yet @UKenyatta himself doesn't pay tax.#Kenyansfirst pic.twitter.com/6TGN7yKGsR
— Moses Owino (@KowinoMoses) September 19, 2018
We laughed at Ugandans for their social media tax. Little did we know that President Uhuru Kenyatta was seriously taking down notes. He now wants to tax the INTERNET heavily! Tough times ahead!
— juma ?? (@jumaf3) September 19, 2018
It's in the social media space that @UKenyatta gets the most bashing for his punitive tax policy. His quick-fix solution to this is to introduce taxes on internet bundles to keep off the poor people from spreading their displeasure. So unfortunate!
— Nyadida (@Nyadish) September 19, 2018
15 per cent excise tax on internet and calls.
The devil is always in the details.
— @PeoplePowerKE ⭕ (@peoplepowerke) September 19, 2018
