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Home Business Kenyan Banks Might Charge More on Transactions

Kenyan Banks Might Charge More on Transactions

by Vince Matinde
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Kenya-shillingIt might cost you more to do transactions in Kenyan banks if the implementation of the 10 percent excise duty is implemented.

Some banks have also warned that they would backdate the fees to June this year, throwing customers in a panic mode.

According to the Standard, the Kenya Bankers Association (KBA) had sent out a warning letter on July 12 stating the need for customers to pay up the fee to Kenya Revenue Authority. In the letter, the bankers association said that the directive would be implemented by August 1, this year.

“KBA, on behalf of its member banks, wishes to notify bank customers and the general public that the excise duty on all such service fees will be payable to the Kenya Revenue Authority,” KBA said.

“Following the enactment by Parliament of the Finance Act 2012 and amendments contained in the Finance Bill 2013, a 10% Excise Duty (Tax) has been introduced in the Customs and Excise Act Cap.472 on service fees charged by banks. The service fees to be taxed include fees and commissions charged on money transfer services and other bank fees, charges and commissions, excluding interest,” the statement added.

Banks like CFC Stanbic have already written to their clients preparing them for the penalties that await them on the new excise fee.

In a letter obtained by the Standard, the bank said that: “Kindly note that in the absence of a deferred implementation date, this letter serves as notification that 10 per cent Excise Duty is chargeable to your account in respect to bank fees from June 18, 2013.”

This new move will expect to increase banking charges hence increasing the gap between those who are banked and the unbanked.

This year, the government implemented an excise fee on mobile money transactions in a bid to raise money for the coffers. Even though there was hue and cry, the mobile companies went ahead to pass on the charges to the consumer.

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