KRA to start deducting excise duty tax for M-Shwari loans at disbursement from March 8
The Kenya Revenue Authority (KRA) will start deducting excise duty tax for M-Shwari loans at the point of disbursement from Friday, March 8
The Kenya Revenue Authority (KRA) will start deducting excise duty tax for M-Shwari loans at the point of disbursement from Friday, March 8.
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.
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.
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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.
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