- The Kenya Revenue Authority (KRA) lost a legal case against payment switch companies, with the tribunal ruling these firms provide VAT-exempt financial services, not taxable ICT services.
- The case focused on Kenswitch, which faced a KES 41.6 million tax bill, but the tribunal found KRA’s tax assessment erroneous and unlawful.
- Payment switch companies like Kenswitch, PesaLink, and Switchlink Africa facilitate money movement between financial institutions, not software sales or ATM supply.
- The ruling highlighted inconsistencies in KRA’s approach, as only switch companies were targeted for VAT, not other parties in the payment chain.
- The decision comes as Kenya plans to unify its fragmented payment systems, aiming for full interoperability across banks and mobile money platforms.
Source: techweez.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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