Kenya's National Treasury has proposed a 16% Value Added Tax (VAT) on fees charged by digital payment providers, potentially increasing costs for users of services like M-Pesa starting 1 July.

• The proposal targets services offered by 42 licensed payment service providers, including M-Pesa, Airtel Money, and Pesapal.
• Treasury's stated intention is to tax the platforms, but experts predict the cost will be passed on to users, potentially impacting millions of transactions daily.
• This move appears to circumvent a High Court ruling from 27 August 2025 that declared commissions earned by PSPs as VAT-exempt financial services.