Nairobi, June 18 -- Money transfer charges levied by payment service providers (PSPs) such as M-Pesa and Airtel Money will be spared from the 16 percent value added tax (VAT) as MPs propose additional amendments to the Finance Bill, 2026 to exempt the cash transfer services.

The Departmental Committee on Finance and National Planning has recommended further tweaks to the first Schedule of the Value Added Tax (VAT) Act providing a clear distinction between mobile transfers and support services such as cash handling and payment processing.

The changes follow objections to the application of VAT on money transfers, payment processing, settlement, merchant acquiring, gateway or aggregation services by various stakeholders including Safarico...