Bankers oppose Rotich’s ‘Robin Hood’ tax
Bankers have taken issue with the government’s plan to tax transactions above Ksh500,000 as proposed by National Treasury cabinet secretary Henry Rotich.
The Kenya Bankers Association (KBA) on Monday moved to court challenging the introduction of tax of 0.05 excise duty tax on transactions above Ksh500,000.
The bankers lobby group argues the law remains vague on the implementation framework of the tax, adding more guidelines are required to effect the same.
Through lawyer Kenneth Alison Franser, KBA argues that there was no public participation in financial matters in relation to the introduction of the new excise duty adding that the imposition of a new duty on less than 10 days notice is neither reasonable nor procedurally fair.
“A conservatory order do issue to delay the implementation of the excise duty introduced by the finance Bill 2018 until such time allowed for alteration of the computer systems operated by the banks to implement the charge of the duty,” reads court documents.
KBA has also pointed out that the computer software in use by banks is not configured to support the charges.
“The implementation of the duty will require changes to the computer programs of all members of the bankers association which cannot be done in this limited time,” reads court papers.
Mr Rotich had proposed the tax as well as an increased excise duty fees charged on money transfer services by cellular phone service providers from 10 percent to 12 percent as part of the ‘Robin Hood’ tax.
Funds raised from the transactions are meant to finance Universal Healthcare.
The association further claims that the proposed duty will significantly hamper the county’s vision 2030 aspirations due to the unattractiveness of cost of carrying out transactions in Kenya as a result of the tax.
KBA is of the view that certain transfers should be excluded from the ambit of this duty based in international best practice, practical application and equity in tax provisions.
The association avers that its members will find it difficult to carry out transactions over Ksh500,000 with consequent disruption of business for the customers of all banks and damage to the economy of Kenya.
“There is ambiguity and lack of clarity. Terms in which the duty is imposed in that there is no definition of what constitutes “money transferred by banks,” KBA said in its petition.
For Citizen TV updates
Join @citizentvke Telegram channel
Video Of The Day: On Viusasa, now you can download your videos and play them back later