digital lenders finance bill

Digital lenders in Kenya have rejected a proposal requiring them to remit a 20 percent excise duty on loan interest. The proposal, which is part of the Finance Bill 2023, has been met with widespread criticism from digital lenders and their customers.

The digital lenders argue that the proposal is discriminatory and will make it more difficult for them to compete with traditional financial institutions. They also argue that the proposal will make credit more expensive for Kenyans who rely on digital lenders for access to credit.

The Finance Bill 2023 is currently being debated in the National Assembly. It is unclear whether the proposal to tax digital lenders will be included in the final bill. However, the digital lenders have vowed to continue fighting the proposal.

The proposal to tax digital lenders singles out digital lenders for a higher tax burden than traditional financial institutions. Traditional financial institutions are only required to pay excise duty on “other fees,” while digital lenders will be required to pay excise duty on any amount that they charge in respect of lending, which includes interest on loans.

Digital lenders argue that the proposal to tax digital lenders will make it more difficult for them to compete with traditional financial institutions because they already have higher operating costs than traditional financial institutions.

They also argue that the proposal will make credit more expensive for Kenyans who rely on digital lenders. This is because digital lenders will pass on the cost of the tax to their customers. This will make it more difficult for Kenyans to access credit, and it will make it more difficult for Kenyans to start and grow businesses.

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The proposal will also disrupt the consistency of tax collection. This is because the proposal is not clear about how the tax will be collected. This uncertainty will make it difficult for digital lenders to plan their finances, and it will make it difficult for the government to collect the tax.

The digital lenders are calling on the government to amend the Finance Bill 2023 to level the playing field. They are also calling on the government to reconsider the proposal to tax digital lenders. The digital lenders argue that the proposal is discriminatory and will have a negative impact on Kenyans who rely on digital lenders for access to credit.

The government on the other hand has argued that the proposal is necessary to raise revenue. The government has also argued that the proposal will help to protect consumers from predatory lending practices.

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Nigel Jr.
As a tech enthusiast and expert, Nigel Jr. is dedicated to providing in-depth and insightful content on all things technology. With a background in online journalism, product reviewing, and tech creation, Nigel has become a trusted source for all things tech.

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