Kenyan financial institutions have increased their charges following the raising of taxes by the government.

The banks and savings and credit co-operative societies (Saccos) have passed the costs to customers, pushing many to the edge.

Fund managers and insurance companies are also expected to raise their charges as they are affected by the new tax.

While some banks and Saccos have already imposed the new charges, others have notified customers that they will take effect from Oct. 1.

The taxes are contained in a finance law passed by parliament last week and signed by President Uhuru Kenyatta soon after. It raised excise duty on all financial transactions from 10 percent to 20 percent.

These include electronic money transfer, ATM and mobile or internet banking services and over-the-counter withdrawals.

The taxes were also slapped on popular mobile money services and fuel products as the government seeks to raise revenue to plug a budget deficit.

Kenyan banks raked in 7 million dollars in fees and commissions in 2017, a slight rise from previous year.

Central Bank of Kenya monetary policy committee said Tuesday that the new tax could affect cash inflow in the economy.