Ksh 5.7bn Saved From Covid-19 Tax Relief by Safaricom

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    • The reduction of corporate taxes from 30 percent to 25 percent by KRA during the covid-19 pandemic has helped Safaricom save 5.7 billion in this period.
    • M-pesa went down by 14.5 percent despite the fact that transaction values went up by 32.9 percent.
    • Safaricom failed to meet its targeted profits by 27.6 percent with M-Pesa, voice, and message being the most affected products.

The government of Kenya lowered corporate tax in the month of April so as to support in sustaining businesses from the impact of the covid-19 pandemic and from this Safaricom managed to save about Ksh. 5.7 billion.

The reduction of corporate taxes from 30 percent to 25 percent did help to prop up in operating the income as mentioned by Vodacom Group which owns about 35 percent in Safaricom.

Vodacom disclosed that total profit from joint ventures and operating profits were influenced in a positive way by the deferred tax rate of sh. 5.7 billion.

Mpesa Lost Safaricom Revenue.

During the six-month duration of covid-19, Safaricom was able to go down by 27.6 percent with M-Pesa, voice, and message affected majorly leading to reduced net profit.

M-pesa went down by 14.5 percent despite the fact that transaction values went up by 32.9 percent.

Still not well defined how long the cut on tax rates will last considering the coronavirus infection rates going high each day, a decision will have to be made on tax credit policy that will be used in the near future.

Despite these cuts on tax, Kenya Revenue Authority clarified that there was a Ksh. 62.96 billion shortfalls on payroll and tax collected that targeted 3 months from the month of September 2020.

Safaricom dropped up to a zero-rate fee on transactions made below Ksh. 1000 so as to reduce cash handling to avoid the spread of coronavirus.

Collections made on value-added tax recorded the least performance by missing its target by 27.19 percent.

Also Read: – KENYAN ECONOMY PICKS UP DRASTICALLY, OUTSHINES THE TREASURY EXPECTATIONS

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