- Kenya Bankers Association opposes proposed 16% VAT on financial transactions
- Bank charges are cost recovery, not direct payments for goods or services
- Services affected by proposed VAT include credit and debit card issuance, money transfers, foreign exchange transactions, and more
- Combined VAT and Excise Duty would raise total taxation on financial services to 40%
- Higher banking costs could hinder financial inclusion for low-income individuals and small businesses
- VAT on foreign exchange transactions could reduce competitiveness of Kenyan products and negatively affect tourism industry
- Increased costs could drive transactions to black market and offshoring of large foreign exchange transactions
- KBA believes introduction of VAT on banking transactions will increase cost of basic banking services and credit, making Kenya less competitive globally.
Source: globalvatcompliance.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
