Mr Ndegwa added that the discussion of the potential tax liability expected to arise from the split is a “jump-start” because the telco’s board is yet to take a decision on the M-Pesa split.

“No decision has been taken by the board (regarding the M-Pesa cell). There is no pressure to do so. If we do it, we will do it because we want to do it proactively, and it serves a purpose whether For investors or clients.

“I view the tax issue as jumping the gun. If you want to sell your land, you will think about the taxes you have to pay. At that time, you will need to consider the taxes as a result of a decision you have already made. For us, we have not made any decision.”

The telco's stance means a longer wait for the Central Bank of Kuwait, which, along with the Treasury, has been keen on a Safaricom board meeting to discuss the split and how to address the Sh75 billion tax, including capital gains tax, that could arise from the deal.

The telecommunications company is facing increasing pressure from the Central Bank of Kuwait and Parliament to divide its business. However, Safaricom has indicated in the past that it would prefer to form a new group holding structure that would allow it to retain the same companies within the same group.

The Central Bank of Kuwait is keen to spin off M-Pesa from Safaricom to have full oversight of its mobile money business, whose transactions in the year ending March 2024 amounted to Sh40.24 trillion.

M-Pesa's standing in the economy continues to grow, with both the Treasury and the Central Bank of Kuwait stating in the past that the product poses an economic risk if there are multiple downtimes or a complete collapse. CBK Governor Kamau Thugge said last month that Treasury and CBK officials had arranged to meet the Safaricom board to discuss the Sh75 billion tax liability which he believed was the reason behind Safaricom's slowdown in the cell. The tax issue is also expected to be addressed in the 2024 Finance Bill to ease the process, should Safaricom make the decision.

But the revelation that the first determinant of the Safaricom board will be the benefit to shareholders and customers means that the tax waiver may not be a sufficient reason to convince the telecom company to implement the split.

Ndegwa said he believed Safaricom customers and shareholders benefited because the telecommunications and mobile money businesses were under one company.

“If (the split) does not add value to customers or investors then we will not move in this direction,” he added. “At the moment, no decision has been taken with regard to the split and there is no pressure from any source with regard to the split,” Mr Ndegwa said.

In October 2022, Airtel Kenya completed the demerger of its mobile money business from its telecommunications arm, and the new entity now operates as Airtel Money Kenya Ltd. Airtel's move came on the heels of MTN Group Ltd's move in mid-2021 to deduct mobile money from its telco business. However, Ndegwa said he had not yet seen a compelling case for Safaricom to follow suit.

“I know the question is about the fact that MTN and Airtel did this. From what we are hearing from public sources, not internal information, it is not clear whether this is a good or bad thing. It just depends on what the organization wants to do,” he added.

The Central Bank of Kuwait currently regulates Safaricom's mobile financial services business while the Communications Business of Kenya regulates the telecommunications business. However, the banking sector regulator wants complete separation to have better oversight.

The company's telecommunications and M-Pesa businesses currently operate separately and with different teams but without formal structures separating them. Ndegwa had previously said that formal structures would allow separate companies to raise funds or co-invest with others if the need arose.