Treasury Cabinet Secretary John Mbadi has moved to calm public fears over the Finance Bill 2026, insisting that Safaricom’s M-Pesa platform will not be affected by proposed tax changes on digital money transfer services.
Speaking at a press conference on Monday, May 25, 2026, Mbadi said the government’s focus is on ICT-driven digital intermediaries rather than traditional financial services. He explained that while the VAT Act currently exempts listed financial services, it does not adequately address modern technology-based platforms that facilitate transactions outside the conventional banking structure.
“Whereas the VAT Act expressly exempts listed financial services, it does not address the VAT treatment of modern digital intermediaries such as Payment Service Providers and other technology-based platforms that facilitate money transfer and financial transactions,” Mbadi said.
He clarified that cash deposits, withdrawals, and foreign exchange transactions will remain exempt under the proposed framework, stressing that the measures are not designed to raise costs for ordinary mobile money users.
“Specifically targeted are the digital services that are ICT-driven as opposed to the traditional financial services such as cash deposits, withdrawals, forex exchange and related services,”
Treasury Cabinet Secretary John Mbadi
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Mbadi revealed that the Treasury had already held discussions with Safaricom to assure the company that M-Pesa is not among the services being targeted. “It is worth noting that we had a meeting with Safaricom on Friday last week and explained that they are not amongst those we are targeting,” he said.
The clarification comes amid growing anxiety among Kenyans who feared that transaction charges on mobile money platforms could rise sharply if the proposals were implemented.
Mobile money remains one of the most widely used financial services in the country, with millions relying on it for daily transactions.
The proposed legislation is yet to be tabled for debate in Parliament.
By Masaki Enock
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