Kenyans cut cross-border calls as new taxes kick in

 Outgoing international voice calls made by Kenyans dropped by eight percent in the three months to September, hit by the new taxes imposed by the Treasury which made calling abroad more expensive.

Data by the Communication Authority of Kenya (CA) shows that outgoing international call traffic dropped to 125.2 million between July and September from 135.9 million over the preceding three months to June, representing a 7.9 percent decline.

“The first quarter of the financial year 2021/22 recorded a general decline in international mobile traffic especially outgoing traffic due to the increase in calling rates for international outgoing calls following the implementation of the new tax regime in August 2021 that resulted in the increase of taxes from the initial 33.4 percent to 39.2 percent,” the regulator said in an update.

President Uhuru Kenyatta in July assented to a Bill that introduced increased excise duty on airtime and data from 15 percent to 20 percent — enabling the Treasury to raise at least Sh8 billion from Safaricom, Airtel, and Telkom Kenya. This extra cost was passed to consumers.

The effect of the drop in outgoing international calls was, however, cancelled by an increase in incoming calls from abroad which rose to 118.4 million from 116.9 million, representing a 1.3 percent increase.

The incoming calls were boosted by Kenyans living in the diaspora in countries such as the United States, United Kingdom, Canada, Australia, among others. As at 2020, over 535, 000 Kenyans were living abroad according to Statista, a German firm that specialises in market and consumer research.

In East Africa, the outgoing calls dropped slightly to 68.8 million from 71.3 million between the period. Similarly, incoming EAC calls rose from 65.6 million to 69.6 million in the period.

The CA data showed that the number of messages sent by Kenyans dropped by 38.2 percent to 5.1 million between July and September from 8.3 million in three months between April and June.

However, incoming abroad messages fell from 10.9 million to 8.3 million in the quarter to September, representing a 23.4 percent slump.