Bankers in Kenya have expressed their delight at the High Court’s decision to temporarily suspend a “Robin Hood” tax on bank transfers of over 500,000 shillings ($5,000) imposed at the start of the month.
Nuru Mugambi, director at the Kenya Bankers Association (KBA), which took the matter to court, told Reuters on Thursday, there were several areas where it would be impractical to implement the tax of 0.05 percent. The court said it will hear the suit on Sept. 17.
“The tax will adversely affect bank customers and investors in our market at a time when the country would be seeking to consolidate its regional leadership as a financial services hub,” she said.
The tax will adversely affect bank customers and investors in our market at a time when the country would be seeking to consolidate its regional leadership as a financial services hub.
Finance Minister Henry Rotich had introduced the tax in his budget speech last month and banks started imposing it on July 1.
Uganda revises mobile money tax
Uganda which had also impsed a tax on mobile money transactions effective July 1, has also backed down after a public outcry. The 1% tax on mobile money which was levied on depositing, sending and withdrawing money from the popular mobile money service has since been revised.
Only 0.5% will now be levied on only withdrawals in what the authorities now say is a move to champion a cashless economy.
Banks and the financial community in the region are strongly opposed to the new taxes, saying it will stifle the flow of funds across the system and curb investments.