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Safaricom at 4 bob...
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VituVingiSana
#51 Posted : Saturday, October 06, 2012 9:16:04 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Jamani
#52 Posted : Saturday, October 06, 2012 9:51:10 AM
Rank: Elder

Joined: 9/12/2006
Posts: 1,554
VituVingiSana wrote:
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.


The hit will be on the consumer, the service provider/manufacturer will push it to you and me.
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guru267
#53 Posted : Saturday, October 06, 2012 2:02:34 PM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
Jamani wrote:
VituVingiSana wrote:
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.


The hit will be on the consumer, the service provider/manufacturer will push it to you and me.


It will cause a demand for even higher salaries!! Sad
Mark 12:29
Deuteronomy 4:16
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VituVingiSana
#54 Posted : Saturday, October 06, 2012 4:16:24 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Jamani wrote:
VituVingiSana wrote:
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.


The hit will be on the consumer, the service provider/manufacturer will push it to you and me.
Safaricom, BAT & EABL will suffer. Higher price leads to lower demand of elastic goods. Folks will start consuming less (for Safcom it could mean fewer transactions) as prices rise.

If Safaricom expects 50% growth in turnover at current prices, if the 'tax' is passed on to consumers it may reduce growth to 45% thus hurting Safcom's profits.

If Safaricom 'eats' the levy turnover growth remains 50% but the expected PAT drops.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Jamani
#55 Posted : Saturday, October 06, 2012 5:08:10 PM
Rank: Elder

Joined: 9/12/2006
Posts: 1,554
VituVingiSana wrote:
Jamani wrote:
VituVingiSana wrote:
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.


The hit will be on the consumer, the service provider/manufacturer will push it to you and me.
Safaricom, BAT & EABL will suffer. Higher price leads to lower demand of elastic goods. Folks will start consuming less (for Safcom it could mean fewer transactions) as prices rise.

If Safaricom expects 50% growth in turnover at current prices, if the 'tax' is passed on to consumers it may reduce growth to 45% thus hurting Safcom's profits.

If Safaricom 'eats' the levy turnover growth remains 50% but the expected PAT drops.

Same applies to Airtel, Telkom, Yu, Mastermind, Keroche etc.
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VituVingiSana
#56 Posted : Saturday, October 06, 2012 6:42:17 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
Jamani wrote:
VituVingiSana wrote:
Jamani wrote:
VituVingiSana wrote:
Githae readies his prescription for more taxes to pay for the recent populist measures.

http://www.standardmedia...h40b-in-new-tax-measure

Safaricom will be hit with this. As will BAT & EABL.


The hit will be on the consumer, the service provider/manufacturer will push it to you and me.
Safaricom, BAT & EABL will suffer. Higher price leads to lower demand of elastic goods. Folks will start consuming less (for Safcom it could mean fewer transactions) as prices rise.

If Safaricom expects 50% growth in turnover at current prices, if the 'tax' is passed on to consumers it may reduce growth to 45% thus hurting Safcom's profits.

If Safaricom 'eats' the levy turnover growth remains 50% but the expected PAT drops.

Same applies to Airtel, Telkom, Yu, Mastermind, Keroche etc.
Well, we can't (directly) invest in Airtel, Telkom, Yu, Mastermind, Keroche that's why I picked BAT, EABL & Safaricom.
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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hisah
#57 Posted : Sunday, October 07, 2012 7:48:28 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
Why aim mobile money? I don't get this treasury move given the economy slump. Slamming the breaks on the velocity of mobile money at this point is senseless!
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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guru267
#58 Posted : Sunday, October 07, 2012 8:12:24 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
hisah wrote:
Why aim mobile money? I don't get this treasury move given the economy slump. Slamming the breaks on the velocity of mobile money at this point is senseless!


Since it will not be passed to consumers the velocity of cash will be left unchanged!!

The volumes in mobile money are HUGE.. I agree that treasury needs some of it for the ballooning budget!!
Mark 12:29
Deuteronomy 4:16
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dunkang
#59 Posted : Sunday, October 07, 2012 9:51:58 AM
Rank: Elder

Joined: 6/2/2011
Posts: 4,824
Location: -1.2107, 36.8831
Me thinks the target was Airtel's free everything nonsense. (note that airtel had just declared free cash transfer, whilst safcon had been heavily advertising MPESA). Never ever fight the ruling class.
Receive with simplicity everything that happens to you.” ― Rashi

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hisah
#60 Posted : Monday, October 08, 2012 7:50:09 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
guru267 wrote:
hisah wrote:
Why aim mobile money? I don't get this treasury move given the economy slump. Slamming the breaks on the velocity of mobile money at this point is senseless!


Since it will not be passed to consumers the velocity of cash will be left unchanged!!

The volumes in mobile money are HUGE.. I agree that treasury needs some of it for the ballooning budget!!

If I were the mobile operator, what incentive do I have to absorb the 10% excise duty on mobile money on behalf of the consumer? This will nail my profits. This tax is a bad idea and still see it affecting money velocity. And the timing is equally questionable due to the current econ slump. It's treasury's duty to manage it's ballooning budget in a sensible way e.g. cutting unnecessary spending esp for those depts that are known for not utilizing their allocations yearly.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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