Giant Telecommunication company Safaricom is not happy with a proposal by National Treasury Cabinet Secretary Henry Rotich to levy tax on phone-based money transfers.

On Monday, Safaricom chief finance officer Sateesh Kamath said that the tax will discourage drive towards modern payment systems.

Last week, Mr. Rotich introduced a 12 percent excise duty on mobile money transfers as he was tabling the 2018/2019 financial year budget.

In response to this proposal, Kamath noted that: “Increased excise duty on mobile money transfers will negatively impact mobile led transfer services and payments and slow down the government’s drive towards a cash-light economy.

"It would be unfortunate to reverse the gains we have made through mobile led financial inclusion in the past few years,”  Kamath was quoted by Reuters as saying.

During the reading of the budget, CS Rotich said that the increased tax would help the government earn revenues to finance important projects.

"Kenya has a well established financial sector with quite a good significant amount of money transacted monthly. These measures are meant to enable the government to get its fair share of revenue to finance some of its key projects," he said.

Other mobile money transfer service include Airtel Money which  owned by Safaricom’s main competitor in Kenya - Airtel.