KenyanTelecom Companies Overtaxed

By Kato Mivule

Telecom companies in Kenya are not pleased with the introduction of a New tax called the 'Rural Access Fee' Tax of one percent. The purpose of this tax is not explained that well but seems to be focused on having more I.T accessibility for the Rural Kenya.

"...Already among the most taxed telecommunications companies in the world, Kenyan mobile phone firms are crying foul over the introduction of a new tax in the form of a Rural Access Fee in the Kenya Communications (Amendment) Act, which is now law...Already we must pay 10 per cent excise duty and 16 per cent VAT on all airtime — this development could hamper the growth of the industry and will cause price erosion,” said Mr Rene Meza, managing director of Zain Kenya. Mr Meza said the additional tax would burden proposed budgets for mobile firms which are already taking a beating from reduced profit margins in the ongoing price war and said the development could even lead to a reduction in new products and services from the mobile players..."
Kenya telecoms fault new tax on airtime - Daily, Monitor
http://www.monitor.co.ug/artman/publish/business_power/Kenya_telecoms_fault_new_tax_on_airtime_78463.shtml

While the cause behind the taxation might be noble and a 'right cause', Kenyan Telecom companies are right in 'crying foul' as they already pay hefty prices when it comes to Mobile Communication Taxes.

This move alone could hamper the growth of Telecommunication in the rural areas that the Kenyan Government seems to target with this new tax. With already 10 percent Exercise Tax and 16 percent VAT is already way too much...