ADDIS ABABA: Despite fears that a new 10 percent tax could be imposed on all mobile money transfers in Kenya, the country's leading mobile operator Safaricom's shares remain largely unchanged. Industry analysts, however fear that the telecom industry must be closely watched in the near future in order to gauge how the government's decision will affect operators and their mobile money offerings. The move to tax transactions could ultimately fall on the customer, as operators are unlikely to take the entire 10 percent tax on their own, which analysts fear could hurt the overall economy and see a decline in the cashless society that has grown dramatically over the past year. Safaricom said in a press statement that it “was still considering various options on how it would handle the extra costs coming with the new tax." On Tuesday, the company's shares had gained 1.25 percent in early trading from the previous day's fall by nearly the same margin. The previous day, Standard Investment Bank said that the new tax “posed a threat to the price of the Safaricom share." Safaricom's money transfer product, M-Pesa, contributed KES 16.87 billion or 15.8 percent of its total revenue in the fiscal year that ended in March. It was among the fastest-growing components of Safaricom's revenue, with “growth of 43 percent in 2011/12 to KES16.87 billion and having more than doubled from two years ago," the company added.
