9 August 2018

Uganda: Mobile Money Dealers Want 0.5 Percent Tax Scrapped

Parliament — Mobile Money dealers and civil society activists have asked lawmakers scrutinising the proposed amendments to excise duty on Mobile Money transactions to drop the 0.5 per cent tax in public interest.

Whereas the government amendments before Parliament seek to reduce the tax from 1 per cent to 0.5 per cent on withdrawals, Bank of Uganda officials independent experts, Opposition leaders, CSOs and the telecoms, have rejected it, saying the tax is discriminatory and unjust.

The House Finance committee chaired by Mr Henry Musasizi (NRM, Rubanda East) yesterday met Kampala Mobile Money dealers, who like other witnesses, asked the government to go slow on the proposed tax. They warned that the proposed Mobile Money tax of 0.5 per cent was killing businesses and hurting the economy in the process. They want the tax scrapped.

"We appreciate the fact that taxes are necessary (to finance the Budget) but, even the money you are looking for as tax will disappear when the Mobile Money business dies out," said Mr Norman Batuma, one of the Mobile Money dealers.

Mr Batuma operates more than 300 Mobile Money units across the country.

He said the tax has had a sharp sting on the industry, with many agents opting out of the business.

Mr Batuma also said many other small businesses that survive on Mobile Money have started to collapse.

"If you don't drop this tax, Mobile Money will be no more and our pockets will run dry and you will have nothing to tax," said Mr Batuma.

Another stakeholder, Mr Ben Kamyuuka, who spoke on behalf of Kampala Mobile Money Dealers, told MPs that the tax is discriminatory since it is not applied to commercial banks.

Besides, Mr Kamyuuka said in the face of the 0.5 per cent tax, Mobile Money dealers are already suffering two other taxes, the excise duty and the withholding tax, which all require them to dig deep into their pockets.

"This is my only source of livelihood, if you kill our jobs, are you going to employ us?" asked Mr Kamyuuka.

The committee also met sections of the civil society which, like Bank of Uganda and other witnesses, queried Mobile Money tax.

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