Mobile phone subscribers look set to pay more for airtime and data services as the government intends to increase excise duty on airtime from the current 10 per cent to 15 per cent.
The increment is contained in President Uhuru Kenyatta’s proposal to Parliament after his remarks last week that his administration wants to balance between short-term pain and long-term gain.
“Telephone and Internet data services shall be charged excise duty at a rate of 15 per cent of their excisable value,” recommends the President.
This means that Sh100 airtime that currently attracts Sh10 tax will now see the Treasury earn an extra Sh5.
The increase in excise duty may prompt telecommunication operators to pass on the burden to subscribers, leading to increased prices.
Alternatively, they may absorb the charge and deny the firms room to make further cuts on their prices.
Airtel Kenya, the second largest by market share, recently cut its calling rate from on-net of Sh3 and off-net of Sh4 per minute to a flat rate of Sh3 per minute across networks, but Safaricom, the market leader, retained its pricing saying that it will not to be drawn into the price wars.
This new proposal comes days after Safaricom #ticker:SCOM cut its Internet charges for various bands and even introduced free Whatsapp services valid for the period of the data bundles.
The telco, with a 67 per cent market share booked Sh95.64 billion voice revenue in the financial year ended March 2018, up from Sh93.46 billion in the previous financial year. Mobile data revenue grew from Sh29.3 billion to Sh36.36 billion during the period.
This means the State will generate at least Sh4.78 billion from Safaricom voice service and Sh1.82 billion from customers’ use of mobile data.
The tax increase comes at a time when subscribers are also paying increased fee on mobile money transfer services after the government raised excise duty from 10 per cent to 20 per cent in July to fund Universal Health Care programme.
The tax is set to affect over 44.1 million subscribers, going by the figure on mobile subscribers contained in Communications Authority of Kenya third quarter report covering up to March 2018.
During this period, the total mobile voice traffic grew by 8.2 per cent to record 12.7 billion minutes from 11.8 billion minutes recorded in the previous quarter.
Total data and Internet subscriptions grew by 8.2 per cent to 36.1 million subscriptions from 33.3 million subscriptions the previous quarter.
World Bank pushes G-20 to extend debt relief to 2021
World Bank Group President David Malpass has urged the Group of 20 rich countries to extend the time frame of the Debt Service Suspension Initiative(DSSI) through the end of 2021, calling it one of the key factors in strengthening global recovery.
“I urge you to extend the time frame of the DSSI through the end of 2021 and commit to giving the initiative as broad a scope as possible,” said Malpass.
He made these remarks at last week’s virtual G20 Finance Ministers and Central Bank Governors Meeting.
The World Bank Chief said the COVID-19 pandemic has triggered the deepest global recession in decades and what may turn out to be one of the most unequal in terms of impact.
People in developing countries are particularly hard hit by capital outflows, declines in remittances, the collapse of informal labor markets, and social safety nets that are much less robust than in the advanced economies.
For the poorest countries, poverty is rising rapidly, median incomes are falling and growth is deeply negative.
Debt burdens, already unsustainable for many countries, are rising to crisis levels.
“The situation in developing countries is increasingly desperate. Time is short. We need to take action quickly on debt suspension, debt reduction, debt resolution mechanisms and debt transparency,” said Malpass.
Kenya’s Central Bank Drafts New Laws to Regulate Non-Bank Digital Loans
The Central Bank of Kenya (CBK) will regulate interest rates charged on mobile loans by digital lending platforms if amendments on the Central bank of Kenya Act pass to law. The amendments will require digital lenders to seek approval from CBK before launching new products or changing interest rates on loans among other charges, just like commercial banks.
“The principal objective of this bill is to amend the Central bank of Kenya Act to regulate the conduct of providers of digital financial products and services,” reads a notice on the bill. “CBK will have an obligation of ensuring that there is fair and non-discriminatory marketplace access to credit.”
According to Business Daily, the legislation will also enable the Central Bank to monitor non-performing loans, capping the limit at not twice the amount of the defaulted loan while protecting consumers from predatory lending by digital loan platforms.
Tighter Reins on Platforms for Mobile Loans
The legislation will boost efforts to protect customers, building upon a previous gazette notice that blocked lenders from blacklisting non-performing loans below Ksh 1000. The CBK also withdrew submissions of unregulated mobile loan platforms into Credit Reference Bureau. The withdrawal came after complaints of misuse over data in the Credit Information Sharing (CIS) System available for lenders.
Last year, Kenya had over 49 platforms providing mobile loans, taking advantage of regulation gaps to charge obscene rates as high as 150% a year. While most platforms allow borrowers to prepay within a month, creditors still pay the full amount plus interest.
Amendments in the CBK Act will help shield consumers from high-interest rates as well as offer transparency on terms of digital loans.
Scope Markets Kenya customers to have instant access to global financial markets
NAIROBI, Kenya, Jul 20 – Clients trading through the Scope Markets Kenya trading platform will get instant access to global financial markets and wider investment options.
This follows the launch of a new Scope Markets app, available on both the Google PlayStore and IOS Apple Store.
The Scope Markets app offers clients over 500 investment opportunities across global financial markets.
The Scope Markets app has a brand new user interface that is very user friendly, following feedback from customers.
The application offers real-time quotes; newsfeeds; research facilities, and a chat feature which enables a customer to make direct contact with the Customer Service Team during trading days (Monday to Friday).
The platform also offers an enhanced client interface including catering for those who trade at night.
The client will get instant access to several asset classes in the global financial markets including; Single Stocks CFDs (US, UK, EU) such as Facebook, Amazon, Apple, Netflix and Google, BP, Carrefour; Indices (Nasdaq, FTSE UK), Metals (Gold, Silver); Currencies (60+ Pairs), Commodities (Oil, Natural Gas).
The launch is part of Scope Markets Kenya strategy of enriching the customer experience while offering clients access to global trading opportunities.
Scope Markets Kenya CEO, Kevin Ng’ang’a observed, “the Sope Markets app is very easy to use especially when executing trades. Customers are at the heart of everything we do. We designed the Scope Markets app with the customer experience in mind as we seek to respond to feedback from our customers.”
He added that enhancing the client experience builds upon the robust trading platform, Meta Trader 5, unveiled in 2019, enabling Scope Markets Kenya to broaden the asset classes available on the trading platform.