Following a heated meeting at State House, Entebbe, the Cabinet has approved President’s Museveni revision of the mobile money tax from 1% to 0.5% adding that the tax will now apply to withdraw transactions alone.
Initially, Parliament had passed an Excise Duty (Amendment) levying 1% tax on every mobile money transaction including depositing, sending, withdrawing and making payments.
This created a public outcry with experts warning that the tax would hurt the economy and kill efforts to increase financial inclusion in rural areas.
While explaining Cabinet’s decision, Finance Minister for Planning, David Bahati, noted that at least Shs23trillion, according to Bank of Uganda figured is sent through Mobile Money compared to Shs63trillion withdrawn.
“This means that when we tax only withdrawals by 0.5%, we can still raise Shs118billion,” he added.
Social Media Tax
Bahati, however, told journalists that the Shs200 of OTT tax payable daily to access social media platforms will remain.
“Telecom companies are working on ways for people to pay the tax more conveniently through airtime and also be able to pay either quarterly or annually.”