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Airtime and gas taxes begin to bite
Consumers to pay more to access cooking gas, talk on phone and borrow using their mobile phones.
What you need to know:
- Cooking gas prices have increased following the adoption of 16 per cent VAT.
- Telcos have similarly raised the cost of airtime.
The pain of new taxes to fund the Sh3.6 trillion budget has started to be felt by Kenyans after President Uhuru Kenyatta assented to the Finance Bill, 2021, which has introduced new levies on airtime and betting.
Cooking gas prices have also increased following the adoption of the 16 per cent value added tax (VAT) that was introduced by the Finance Act, 2020 but whose implementation by the Kenya Revenue Authority (KRA) was delayed for a year to cushion consumers from a high cost of living.
Telcos have already raised the cost of airtime as the government targets at least Sh8 billion from the 62 million mobile phone subscribers at a time airtime and data have become a necessity.
“Dear customer, due to an increase in Excise Duty from 15 per cent to 20 from July 2, your call rate is now Sh2.78 per minute. SMS and data rates remain the same,” Airtel Kenya notified its customers on Friday via SMS.
“In view of this change, Airtel Kenya will increase its headline voice tariff to Sh2 plus taxes which will equate to Sh2.78,” Airtel Kenya managing drector Prasanta Das Sarma added in a statement.
Safaricom, Telkom Kenya and Equitel customers will also pay more to call for the same minutes, while fees for M-Shwari and mobile loans will also increase.
Imported sugar confectionery
Safaricom customers on the prepaid tariff currently call at a voice rate of Sh2.2 per minute during off-peak hours and Sh4.3 per minute during peak hours, while Telkom charges Sh1.5 per minute for voice calls.
“Dear customer, following the enactment of the Finance Act, 2021 by the government, we wish to inform you that beginning July 1, the fees on your M-Shwari loan will be subject to Excise Duty at 20 per cent,” Safaricom notified customers on Friday.
The 16 per cent VAT has pushed up the price of a 6kg liquefied petroleum gas (LPG) cylinder by Sh168, from Sh1050.
The tax will also see the 13kg cylinder go up by Sh360 to Sh2,610.
However, punters sighed with relief after Parliament reduced the excise duty charged on their winning from 20 per cent that was proposed by the Treasury to 7.5 per cent, what will see them pay Sh75 to the taxman for every Sh1,000 they win through betting.
Meanwhile, candies will also cost more after the Finance Act increased the rate of excise duty on imported sugar confectionery from Sh20 to Sh35 per kilo which will force manufacturers to pass on the additional tax burden to consumers.
The increase in the prices is expected to increase inflationary pressure.
