Safaricom is staring at a Ksh78 billion tax liability as the Central Bank of Kenya (CBK) pushes for the split of M-Pesa from the telco, in a bid to give it better oversight over the financial entity. This has delayed a process that's been in the works for a couple of years now.

According to CBK Governor Kamau Thugge, CBK is intending to oversight M-Pesa as a separate entity from Safaricom after it transacted Ksh35.86 trillion in the year ended March 2023.

While Safaricom is pushing to have an international reorganisation that will see it stay clear of the tax liability, Thugge has announced that CBK together with the Ministry of Treasury will meet with Safaricom officials to deliberate on the way forward since the government owns 40 per cent of the telco.

“We have arranged to meet with the board of Safaricom in the near future. The Treasury also needs to be involved in this particular case. One of the factors that has been delaying the delinkage of M-Pesa mobile money from the rest of Safaricom is the tax liability, which is fairly significant in the order of roughly Sh75 billion and what to do with it,” Dr Thugge said in a media briefing on Thursday, April 4, 2024.

“We believe there needs to be a separation and that CBK should oversight M-Pesa and so we will therefore continue engaging Safaricom and the National Treasury to see how quickly this separation can be done.”

The Safaricom - M-Pesa split has been dragged on by the telco over the years for fears of bein hit with a heavy tax bill by the Kenya Revenue Authority (KRA). As a result, the company has resorted to negotiating for waivers before it can proceed with the separation.

For the year ended March 2023, Safaricom posted a net profit of Ksh52.48 billion, and, therefore, a tax bill of Ksh75 billion would be too hefty to foot.

In the year ended March 2023, Safaricom remitted Ksh132.6 billion in duties, taxes and licence fees making it the single largest corporate taxpayer in the Kenya.