The Central Bank of Kenya's (CBK) push to separate M-Pesa, the country's dominant mobile money platform, from its operator Safaricom, has encountered a significant hurdle – a potential tax liability of Sh75 billion.

Governor of the CBK, Kamau Thugge, revealed this information during a Monetary Policy Committee briefing on Thursday.

While acknowledging the setback, Governor Thugge reiterated the bank's commitment to achieving the delinkage.

"We believe that there should be a separation and that Central bank should oversight M-Pesa," Thugge stated

According to Thugge, the move would allow the Central Bank to exercise proper oversight over M-Pesa and vowed to continue with the push.

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"We will continue to engage Treasury and Safaricom to see how quickly this separation should be done," Thugge added.

This is not the first time tax implications have complicated the delinkage process.

In December 2023, Thugge alluded to similar challenges concerning the severance tax.

Safaricom, the current operator of M-Pesa, has previously voiced its reservations about the split.

The company fears that the separation would lead to higher transaction costs for users, putting M-Pesa and other mobile money providers at a competitive disadvantage.

Safaricom has also highlighted the existing Finance Act as a roadblock.

This act reduces the excise duty on bank transactions from 20 per cent to 15 per cent, while simultaneously increasing the mobile money transfer levy from 12 per cent to 15 per cent.

The Central Bank and Safaricom seem to be at odds over the delinkage, with the looming tax burden posing a significant obstacle.

Only time will tell how this issue will be resolved and whether the envisioned separation of M-Pesa from Safaricom will come to fruition.