KRA to Deduct Excise Duty for M-Shwari Loans at Disbursement From March 8: "Affects All Customers"

 

The Kenya Revenue Authority (KRA) will start deducting excise duty for M-Shwari loans at the point of disbursement from Friday, March 8. Safaricom CEO Peter Ndegwa during an investor briefing. What's new about excise duty on M-Shwari? M-Shwari loans are offered by Safaricom in collaboration with the NCBA Bank. In the partnership, Safaricom provides the platform while NCBA Bank provides the funds.  In a notice to customers, NCBA announced the excise duty charge on loan facility fees will now be collected when customers receive loans. "Dear customer, we wish to advise that effective March 8, 2024, the excise duty due on the facility fees charged on your approved M-Shwari loan amount will be deducted at the point of disbursement of your loan. Previously, excise duty was collected at the point of loan repayment," part of the statement read. What's the excise duty rate? The Finance Act 2021 introduced excise duty tax on all loan-related fees/charges, including M-Shwari loans. Following the law's enactment, a 20% excise duty tax was imposed on facility fees charged on M-Shwari loans since the 2021/2022 financial year. "The facility fees charged on M-Shwari loans remain the same at 7.5%. As well, the excise duty tax charged on the facility fees remains unchanged at the rate of 20%," the statement added.  If the loan amount applied is KSh 1,000, the facility fees will be KSh 75 (7.5%), while the excise duty tax due will be KSh 15 (20% of KSh 75). The loan amount received will be KSh 985. How to increase the M-Shwari limit M-Shwari has gained popularity among Kenyans because it is a fast and reliable way of accessing a loan. Since its invention, the service has seen many people register and use it regularly. Like any other loaning service, many factors determine one's creditworthiness. Saving consistently and repaying loans on time will see your limit increased.

by  Japhet Ruto