Kibaki lauds Safaricom for being top taxpayer
- Published on 25 October 2012
Kenya's biggest mobile operator by market share Safaricom has for the fifth consecutive year emerged as the country 's highest taxpayer, resulting in praise from the nation’s president.
The telco is one of ten companies that contributed a total of 115 billion shillings ($1.3 billion) in taxes in the 2011/12 financial year. This revelation has emerged after Safaricom also announced this year that it posted a 12.63 billion shilling ($148 million) net profit.
Subsequently, Kenyan President Mwai Kibaki this week lauded the telco for its contribution that he says has enabled government to finance key projects and boost the country's economic development.
Safaricom's status as a leading taxpayer has worked to its advantage in the past. Last year, the mobile operator successfully lobbied the president to halt the revision of mobile termination rates, arguing that the move would hurt its revenues and reduce the taxes it pays the government.
While the presidential freeze on the implementation of lower mobile termination rates worked to the advantage of Safaricom, its competitors Indian operators Airtel Kenya and Essar Telecom (YU) expressed frustration, saying they were incurring significant losses.
The East African nation's tax collector, Kenya Revenue Authority (KRA) named East African Breweries Ltd , the Teachers Service Commission, British American Tobacco Kenya Ltd, Kenya Commercial Bank, Barclays Bank, Kenya Ports Authority, Equity Bank, Standard Chartered Bank and KenGen as the other top ten leading taxpayers.
The ten companies accounted for 17% of total revenue collected in the year. KRA will be banking on Safaricom and other leading private companies to boost its target of collecting 1 trillion shillings ($11.7 billion) in ordinary revenues this financial year.
KRA collected about 700 billion shillings ($8.2 billion) in the 2011/2012 financial year.
President Kibaki said persons and businesses participating in tax crimes, like tax evasion, will be prosecuted.
“I direct the relevant Government agencies to put in place strict and foolproof measures to prevent, detect and prosecute tax-related crimes,” said Kibaki.
According to the president, improved tax collection have enabled the Kenyan Government to fund about 95% of the country's total annual budget.