Commercial lenders are bracing customers for deductions on their accounts to pay for the Treasury’s ‘Robin Hood’ tax should the High Court rule that the levy ought to have been paid for the 19-day period before suspension.
Nairobi Securities Exchange-listed lender Stanbic Bank is the latest to inform its customers that they may have to pay taxes on all chargeable transactions for the period between July 1 when it took effect and July 19 when the court suspended it.
“Please note that should the High Court determine that the excise duty should have been collected, we advise that we will debit your account with the amount of excise duty chargeable on the applicable bank transfers initiated during this period,” wrote head of personal banking Silpah Owach in a notice.
This means that ahead of the hearing set for Monday, banks may debit customer accounts with the 0.05 per cent excise duty for applicable transfers during that period.
On Wednesday, the bank told the Business Daily that it had taken the decision independently even though it did not give details of how many accounts stand to be affected.
Last month, I&M Bank sent a similar e-mail to its customers. Its marketing and product development general manager, Suprio Sen Gupta, said that the lender had reversed to customers all the taxes they had collected after the implementation of the duty was suspended.
“If the court decides that we ought to have collected, we shall debit the accounts,” he said then.
Kenya Bankers Association (KBA) CEO Habil Olaka said there are lenders that did not know what to collect and so never implemented the taxes during the period it remained in force.
“Since each bank is affected differently, we do not have an industry stand. Each is taking independent decision based on how it had interpreted the law,” Mr Olaka said on Wednesday.
The High Court suspended the new taxes imposed under the Finance Bill 2018, including those on mobile money and kerosene after KBA argued that “bank transfer” is vague and the Treasury had not defined it.
Court papers show that KBA was seeking to delay implementation of the duty until a proper definition of the term “money transferred by banks” is provided and sufficient time allowed for banks to alter computer systems to implement the charge of duty.
On Wednesday, Mr Olaka said that once banks get clear definition, it will take them up to three months to configure their systems to start deductions.
“We are therefore seeking three months period to comply with the tax once the court gives us clear definition,” he said.
The court then directed Kenya Revenue Authority and Attorney General to file and serve replying affidavits and thereafter, all parties to file and exchange written submissions. The hearing to highlight the submissions will happen next Monday.
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.