Government Makes u-turn on Mobile Money Tax, Scraps off 1% for Sending

Ugandan’s strike on the tax levied on mobile money transactions could be paying off. In the latest changes, the Ugandan Government has approved a proposal to scrap the 0.5% tax on receiving, sending, and making payments on transactions while the 0.5% levy on withdrawing remains.

The announcement was made by the State Minister for Finance, Planning and Economic Development; Hon. David Bahati at a press briefing that was held at the State House, Entebbe on Tuesday.

The announcement comes after Prime Minister; Ruhakana Rugunda last week said that the taxes would be reviewed and a new bill will be brought. His announcement followed a protest led by Hon. Robert Kyagulanyi Ssentamu, in a bid to drop the taxes. In addition the #SayNoToMobileMoneyTax, and #ThisTaxMustGo campaigns that are ongoing micro-blogging website; Twitter.

Initially, the Excise Duty (Amendment) Bill 2018 that was presented to and passed by the Ugandan Parliament was subsequently assented to by H.E the President of Uganda; Yoweri K. Museveni, and consequently became an Act of Parliament. The Act placed a 1% levy on receiving, making payments, and withdraws through mobile money transactions. But after the bill was passed, the President in a letter asked to scrap the tax on depositing, also stating that the 1% was a miscommunication as the actual figure was supposed to be 0.5%. However, the Government revenue collection agency; Uganda Revenue Authority (URA) hadn’t confirmed about this as it was reported that people were still charged the 1% levy. The President asked telcos whoever was charged the 1% on transactions to be refunded.

With these changes made on mobile money transactions, the amended bill will be presented to the Ugandan Parliament on Thursday, July 19th for the first reading as directed by the Prime Minister.

According to Minister Bahati, Government grossed UGX5 billion from the mobile money tax in just a week of implementation out of a projected UGX2 billion. It is worth knowing that, this sum (UGX5 billion) came from all mobile money transactions; receiving, making payments, and withdraws at a levy of 1%.

Bahati further told reporters of the Uganda Media Centre, that if they charged the levy of 0.5% on withdraws only, they will still be able to raise UGX118 billion which is slightly high about what they had budgeted (UGX115 billion) for in this years budget.

Bahati also touched on the issue of refunding customers whose money was deducted due to the erroneous tax, saying the reimbursement for the tax on deposit will be easy and quick, following the President’s directive.[related-posts]

While, OTT tax has been in discussion as well, the tax still stands. Ugandans will continue paying they UGX200 levy to use social media platform. The Minister of ICT and National Guidance; Hon. Frank K. Tumwebaze asked Ugandans to be committed and contribute to the country’s development as the Government holds its ground on the social media tax.

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