Treasury hits M-Pesa, Pesapal with 16pc VAT

The Treasury is seeking to impose a 16 percent value-added tax (VAT) on 42 payment platforms in Kenya, including M-Pesa and Pesapal, which could lead to increased user fees. Albert Mwenda, the Treasury's budget director-general, stated that VAT would apply to the earnings of payment service providers but not to consumer money transfer services. Safaricom, which operates M-Pesa, opposes the tax increase, arguing it would primarily hurt the poor who rely on mobile transfer services.