Kenyan Banks Oppose State Plan to Hike Tax On Financial Services

Kenya’s plan to charge value added tax on financial transactions will raise total taxation on financial services to 40% from 15% currently, impacting affordability and access, according to an industry lobby.

Levying the tax on foreign-exchange transactions in particular will widen margins charged, posing risks to economic growth by taxing export proceeds and hindering the competitiveness of Kenyan products, Kenya Bankers Association Chief Executive Officer Raimond Molenje said.

In addition, it will hurt foreign investment, reverse recovery of tourism and further threaten the stability of foreign-currency reserves, he said in an emailed statement.

“The increased cost of banking to customers ...