Many Kenyans pay excise duty several times a day without noticing. It is built into the cost of airtime, mobile money transfers, bank charges and betting stakes. The rates sit in Part II of the First Schedule to the Excise Duty Act. This article lists the rates in force as consolidated in mid-2026, what each covers and how to account for them in a business.

The rates

Service Excise rate Charged on
Telephone and internet data services 15% The excisable value of the service
Money transfer fees by banks, transfer agencies and other financial providers 15% The fee charged
Money transfer fees by mobile phone and payment service providers 15% The fee charged
Other fees charged by financial institutions 20% The fee charged
Fees charged by digital lenders 20% The fee charged
Betting, gaming 5% The amount deposited into the customer's wallet
Lotteries and prize competitions 5% The amount paid to buy a ticket or take part
Fees on virtual asset transactions 10% The fee charged
Advertising on alcohol, betting, gaming, lotteries and prize competitions 15% The fee charged

The excise is on the fee, not on the money being sent. If a mobile money transfer costs a fee of KES 50, the excise is 15 percent of that fee, which is KES 7.50, and not 15 percent of the amount transferred.

Airtime and data

The 15 percent applies to the value of telephone and internet data services. For prepaid airtime, the excise is included in the price you pay and the telecom operator accounts for it to KRA. A business buying airtime for staff includes the excise in the cost. Test numbers in the excise duty calculator.

Mobile money and bank charges

Providers add excise to the transaction fee. Many bank charges, such as ledger fees, card fees and account maintenance, are "other fees charged by financial institutions" and attract the 20 percent rate. Interest itself is not a fee, so excise is not charged on interest, though a fee for arranging a loan is. For a business with large bank charges, excise is a real cost: check your statement for the line, and see borrowing for your business: loans and tax.

Betting

The excise on betting and gaming is 5 percent of the amount deposited in the customer's betting or gaming wallet, following the Finance Act 2025 change in the basis and rate. Winnings are taxed separately by withholding. The effects are set out in betting tax changes: excise and winnings, and the betting tax calculator shows both.

Who pays and who collects

Excise on services is collected by the provider, such as the telecom operator, bank or betting company, and paid to KRA. The consumer bears it through the price. Because excise is a cost, a VAT-registered business cannot claim it back as input tax, though VAT charged on the fee including excise may be claimable if the invoice shows it. Check how your provider shows each item on the statement.

Is the excise inflation-adjusted?

The Act provides for an annual adjustment of some excise rates for inflation on 1 October. That adjustment applies to the specific-rate goods in Part I, such as cigarettes and per-unit amounts, and does not apply to percentage-based service rates above.

Accounting treatment

  • Record bank and mobile money charges, including excise, as expenses in the month they are charged. The M-Pesa till reconciliation catches the fee lines.
  • Reconcile your bank statements: bank reconciliation step by step.
  • For a business with a high volume of transfers, ask your provider about bulk pricing or bank transfers, which may attract a different fee.

Planning

Excise on fees is small per transaction but adds up for a business that pays many suppliers by transfer. Consolidate payments, use bank transfers where fees are cheaper than mobile money, and consider whether airtime for staff is better replaced with a data bundle. Add the costs to your monthly income and expense planner.

Other excise in the Act

Excise also applies to alcohol, tobacco, fuel, vehicles, sugar confectionery and some other goods: see excise duty on imports and vehicles and vehicle and motorcycle excise rates.

Frequently asked questions

Is excise charged on the amount I send by M-Pesa? No. It is charged on the fee that the provider collects for the transfer.

Does the 15 percent apply to data bundles? Yes, telephone and internet data services are covered by the same rate.

Is VAT charged on top of excise? Fees are generally standard-rated or exempt depending on the service. Check your statement and provider's tariff.

Can I get excise refunded? No, excise on services is a cost to the consumer.