How New 14% VAT Affects Safaricom Products and Services

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SafaricomCOVID-19. We all have a general idea about the virus and what it has done to the world.

In a Kenya context, the government has been on the frontline in ensuring citizens are safe or the rate of transmission is managed with the hope of containing the menace. The measures mean that some Kenyans who support the economy have limited hours to do their work. The measures, such as the 7 PM – 5 AM curfew imply that businesses will not be running at that time, so they are going to lose money until the situation is fully addressed.

Not to keep Kenyans pressed financially, who are also hoping against hope that their current economic constraints are temporary, the government announced a couple of tax measures with the aim of reducing the impact of COVID-19. One of the measures is the reduction of VAT from 16% to 14%, which goes live today.

Kenya’s largest and most profitable telecoms operator Safaricom has reviewed its products and service offerings to reflect the tax changes. The revisions are as follows:

  1. All pre-paid customers will receive 2% extra airtime on every recharge to reflect the new 14% VAT. For example, if you buy KES 50 worth of airtime, you will get an extra shilling.
  2. All Home Fibre customers will get back 2% of the cost of the plan as credit to their fibre account to reflect the change. For example, customers on Bronze, which costs KES 2900, will receive KES 58 credit that will then be used for the following monthly payment.
  3. The price of all devices such as phones at Safaricom Shops and Masoko has been cut to reflect the new change.
  4. The price for all Fibre for Business, Personal PostPaid and Corporate PostPaid Products, including Zidisha Plus, Cloud, Security, and IoT has been adjusted to reflect 14% VAT.

The changes, while insignificant to some, affects other products and service as well, with the overall goal of offloading some financial burden from the backs of struggling Kenyans.