@BusinessDaily

I&M Bank customers face backdated 'Robin Hood' tax

2 months ago, 10 Aug 06:42

By: Patrick Alushula

I&M Bank has alerted its customers that it will deduct from their accounts backdated taxes on money transfers between July 1 and July 18 if the bankers’ lobby loses the ongoing court battle on ‘Robin Hood’ tax.

The bank informs customers in an email that they will have to pay taxes on all the chargeable transactions for the 19 days that the law was in force before the High Court suspended it on July 19.

The Kenya Bankers Association (KBA) has filed a case seeking to stop implementation of a 0.05 per cent excise duty on cash transfers above Sh500,000.

“In this regard, please note that should the High Court determine that the excise duty should have been collected, we advise that we shall debit your account with the amount of excise duty chargeable on the applicable bank transfers initiated during this period and remit the same to the KRA (Kenya Revenue Authority),” said the lender in the e-mail.

Reversed taxes

According to I&M marketing and product development general manager Suprio Sen Gupta, the bank had reversed to customers all the taxes they had collected after the implementation of the duty was suspended.

“The ones we had debited were reversed back to customers. So if the court decides that we ought to have collected, we shall debit the accounts. From the date the law becomes applicable, as will be determined by the court, we will debit retrospectively,” he said.

The High Court suspended the new taxes imposed under the Finance Bill 2018, including those on mobile money and kerosene after the KBA argued that "bank transfer" is vague and the Treasury had not defined it.

KBA chief executive Habil Olaka said individual banks are assessing the risks against the possible outcome and taking independent decisions on the matter.

“Each bank is taking a decision based on how it had interpreted the law,” he said.

Barclays Kenya #ticker:BBK and Equity Bank #ticker:EQTY were the first to announce to their customers that they had effected the taxes before the High Court suspension.


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@BusinessDaily

I&M Bank customers face backdated 'Robin Hood' tax

2 months ago, 10 Aug 06:42

By: Patrick Alushula

I&M Bank has alerted its customers that it will deduct from their accounts backdated taxes on money transfers between July 1 and July 18 if the bankers’ lobby loses the ongoing court battle on ‘Robin Hood’ tax.

The bank informs customers in an email that they will have to pay taxes on all the chargeable transactions for the 19 days that the law was in force before the High Court suspended it on July 19.

The Kenya Bankers Association (KBA) has filed a case seeking to stop implementation of a 0.05 per cent excise duty on cash transfers above Sh500,000.

“In this regard, please note that should the High Court determine that the excise duty should have been collected, we advise that we shall debit your account with the amount of excise duty chargeable on the applicable bank transfers initiated during this period and remit the same to the KRA (Kenya Revenue Authority),” said the lender in the e-mail.

Reversed taxes

According to I&M marketing and product development general manager Suprio Sen Gupta, the bank had reversed to customers all the taxes they had collected after the implementation of the duty was suspended.

“The ones we had debited were reversed back to customers. So if the court decides that we ought to have collected, we shall debit the accounts. From the date the law becomes applicable, as will be determined by the court, we will debit retrospectively,” he said.

The High Court suspended the new taxes imposed under the Finance Bill 2018, including those on mobile money and kerosene after the KBA argued that "bank transfer" is vague and the Treasury had not defined it.

KBA chief executive Habil Olaka said individual banks are assessing the risks against the possible outcome and taking independent decisions on the matter.

“Each bank is taking a decision based on how it had interpreted the law,” he said.

Barclays Kenya #ticker:BBK and Equity Bank #ticker:EQTY were the first to announce to their customers that they had effected the taxes before the High Court suspension.


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