Banks rush to implement new ‘Robin Hood’ taxes

Commercial Banks are rushing to implement Treasury’s new Robin Hood tax of 0.05 percent on bank transfers of above Sh500,000 imposed last month.

Customers at a banking hall in Nairobi. FILE PHOTO | NMG 

IN SUMMARY

  • Some banks began writing to customers from Saturday notifying them of the new fee adjustment effective July 1.

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Commercial Banks are rushing to implement Treasury’s new Robin Hood tax of 0.05 percent on bank transfers of above Sh500,000 imposed last month.

Some of the lenders began writing to customers from Saturday notifying them of the new fee adjustment effective July 1.

“Dear customer, in line with the 2018 budget, we will charge excise duty of 0.05 per cent on bank transfers of Sh500,000 and above, while excise duty on mobile transfer fees will increase from the current 10 per cent to 12 per cent. For more details, please contact your branch,” wrote Barclays Bank of Kenya #ticker:BBK in one such notice.

Equity Bank #ticker:EQTY has issued a similar notice.

In his June budget speech Treasury secretary Henry Rotich proposed to raise the excise duty on mobile transfers to 12 per cent from 10 per cent as part of broader measures to raise an extra Sh27.5 billion in state revenues.

READ: Treasury slaps higher tax on money transfer

Rotich justified the tax increases saying they would be used to fund free health care for all.

“Mr Speaker, our economy has a well-established financial sector in the region with significant sums of money transferred monthly,” said Mr Rotich.

“In order for the government to get a fair share of revenue from these financial activities and to finance critical Government programmes, I propose to introduce a Robin Hood Tax of 0.05 per cent on any amounts of five hundred thousand shillings or more transferred through banks and other financial institutions,” he said.

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