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Pain for Kenyans as telcos increase call rates after rise in tax

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Kenyans have expressed outrage, following the rise in the cost of services, including airtime and internet, with the implementation of the Finance Act, 2021.

The Finance Act of 2021 introduced amendments to various tax-related Acts of Parliament (Income tax, VAT, Exercise Duty, Tax Procedures and Miscellaneous fees and Levies) as well as other related statutes in the public finance sector including the Insurance Act, the Capital Markets Act, the Retirements Benefits Act, the Central Depositories Act, and the Stamp Duty Act.

The Act was gazetted by the Treasury Ukur Yatani days after assent by President Uhuru Kenyatta.

Call rates across the three main telecommunication networks in the country have also increased since the Act came into effect.

Telkom informed its customers that the amendment of the Excise Duty Act 2015, through amendments to the Finance Act 2021, will lead to an increase in Excise Duty from 15 per cent to 20 per cent, effective July 1, 2021.

“Having taken time to extensively deliberate on how best to address these changes, a review of our costs is inevitable. Effective July 6, 2021, our headline price for our Pay-As-You-Go Telkom-to-Telkom Voice will increase to Sh.2.78cts. Our Pay-As-You-Go Voice for off-net calls will increase to Sh.4.30cts. The cost to send an SMS within the Telkom network and across other networks will be Sh.1.15cts.”

Telkom added that its Pay-As-You-Go price for Mobile Data will increase to Sh.4.50cts per MB, but both Voice and Mobile Data Bundle prices will not be affected.

Airtel also increased its headline voice tariff to Sh2, equating to Sh2.78 per minute inclusive of the tax.

“Airtel Kenya has ensured that prices of all data and voice bundles remain unchanged. Hence, there will be no changes to Amazing, UnlimiNET, and Tubonge bundles,” Airtel said in a statement.

Safaricom also said that it has revised its out-of-bundle voice calls, data, and SMS as well as the integrated plans including All-In-One services to reflect the increased Excise Duty.

“All our consumer data bundle prices remain unchanged (No-Expiry bundles, daily bundles, weekly bundles, monthly bundles, and Giga bundles).”

The move has also led to the reintroduction of VAT on liquefied petroleum gas (LPG) but delayed the levy for one year to July due to concerns about the cost of living.



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