Members of the Assembly of Kenya have voted to increase excise duty on phone and data charges from the initial 15% to 20%.
The proposed amendment is supposed to take effect today July 1st 2021 and one can only imagine how it will affect the many people who depend on the internet for their daily bread. The ripple effects will also affect innovation, penetration levels and people who also look for jobs through online platforms.
The Corona pandemic has seen most people work from home and an increase in phone and data charges is not going to help matters any for a population that is already struggling with no or half pay.
Most government services can only be accessed online and this means that people seeking to get driver’s licenses, parking, land transfers and license applications will really have a hard time as accessing the services can take some time and they need data for this not to mention the repetitive nature of the need of some of the services.
Also included in the amendments there will also be an increase in the excise duty will now be at 7.5% for gaming and 12% for money transfer while the betting and lottery tax will also go up to 30% from 20% respectively.
The Finance Act of 2018 had excise duty on several key services and telephone and internet services at 15 percent.
The proposal by MPs suggests the deletion of ‘the rate of fifteen percent’ and insertion of ‘rate of twenty percent.’
When the original Finance Bill 2018 came into effect, the cost of making calls and Home Fibre went up and in some instances users had to pay KES 1000 more for a mid-tier connection.
So far, Kenya has nearly 41 million mobile data subscriptions who charged among the most expensive costs as compared to other countries in East Africa. On the flipside, Tanzania is the country in East Africa with the cheapest data charges.
This is according to recently released data by British technology research firm Cable.
“In Sudan, the cost of mobile internet is $0.27, cheapest in Africa and fifth in the world. Algeria is second at $0.51 and Somalia third at $0.60. Tanzania has the cheapest data in East Africa at $0.75 for every gigabyte of data,” says the survey
The data in the study was collected and analysed between December 8, 2020 and February 25, 2021 and it reveals that Rwanda comes second at $1.25, Uganda is third at $1.56 followed by Burundi ($2.10) while Kenya comes at the tail end with $2.25 per gigabyte (GB). Last year, Kenya was second in East Africa last year charging $1.04.
The fate of the new amendments and by extension the livelihood of very many Kenyans lies in the hands of the president.