KBA seeks suspension of 'Robin Hood' tax on bank transfers above Sh500,000Monday July 02 2018
The Kenya Bankers Association (KBA) has filed a suit seeking to suspend implementation of a 0.05 per cent excise duty on transactions above Sh500,000.
The bankers claim not enough information has been provided to implement the "Robin Hood" tax imposed on Sh500,000 and above transferred through banks and other financial institutions.
They argue that the computer software in use by banks are not configured to support the charges.
The bankers' lobby also claims the move is unconstitutional since it was not subjected to public participation.
READ: Treasury slaps higher tax on money transfer
Treasury Cabinet Secretary Henry Rotich announced the excise duty on June 14 in his budget speech for the 2018/2019 financial year.
The new tax requires any Kenyans who withdraws any amounts of Sh500,000 or more transferred through banks or other financial situations pay 0.05 per cent of the value of the transaction.
He also announced a surprise increase in mobile money transfer levies, which would see Kenyans pay an excise duty of 12 per cent on money transfer services, up from the current 10 per cent.
Mr Rotich said the proceeds of the taxes would go towards financing the universal healthcare plan.
“In order for the government to get a fair share of revenue from these financial activities and to finance critical programmes, I propose to introduce a ‘Robin Hood Tax’ of 0.05 per cent on any amounts of Sh500,000 or more transferred through banks and other financial institutions,” he said.