Got this from my bank recently

Dear Customer,

The Government of Kenya through an Act of Parliament, the Finance Act No. 57 of 2012, introduced a 10% excise duty on financial services effective 1 February 2013.

The law states as follows:

Amendment to 5th Schedule of Customs & Excise Act:
§ Excise duty on fees charged for money transfer services by cellular phone service providers, banks, money transfer agencies and other financial service providers shall be ten percent.
§ Excise duty on other fees charged by financial institutions shall be ten percent.

As a result of this legislation, a 10% excise duty will be imposed on all fees charged by banks

The interpretation by the Kenya Revenue Authority (KRA) is that the excise duty charge is applicable to the banking services that we currently provide to you. The Kenya Bankers Association (KBA), has referred the interpretation of this provision to the High Court of Kenya and the matter is yet to be determined. However, as a result of discussions between KBA and KRA, it has been agreed that in the interim, banks will collect the 10% excise duty effective 1st August 2013 and pay to the KRA.

Kindly note the above and If you have any queries on the above, please contact your branch or relationship manager.

From the above, the emphasis is that the bank will will collect the 10% excise duty on fees.

Loan interest are not fees to the best of my knowledge but loan processing fees will be subject to this excise duty.

Clearing of dividend check is done by the bank for free so this will not be subject to the excise duty.

The key word here is fees. Fees charged by the bank will attract the 10% excise duty. *My understanding* *from 1st august will be checking my statements keenly on the impact of this tax**surely not a welcome tax in a country seeking financial inclusion*

the levy is on transaction fees & commissions only - what the bank is charging you for processing things on your behalf. this will make loans slightly expensive.

Wao...they will do anything to kill any EAC deal that seems to benefit the rest.

They even have a withholding tax on loan interest. ABK!!!

For those of us who are slow,I go withdraw cash at the ATM,the bank charges me Kshs. 30.
Now from Aug this will be Kshs. 33? ama?

But have we not being paying this on money transfer already?

Surely, if the state takes all that, then the bank/Dahabshil/western union takes another 2%, what will be remaining to send?

@ Magigi.

I can help explain. Give me the TBill / TBond issue number, how much you invested and what did you quote as an interest rate.