Minister for Finance Matia Kasaija is in shock to hear that government is considering to tax cash withdrawals from commercial banks.
This follows the surfacing of a letter from Finance Ministry dated February 9 addressed to Bank of Uganda governor Emmanuel Tumusiime-Mutebile where Patrick Ocailap, the deputy secretary to the treasury on behalf of the secretary to the treasury revealed plans by the Government to collect tax revenue from all bank withdrawals in form of cash at either bank tellers or Automated Teller Machines (ATMS).
“Tax on withdrawal of money? I am hearing this for the first time. Yesterday, we were talking about tax measures and I have not seen that among the tax measures. I am hearing it for the first-time,” Kasaija said in an interview with Daily Monitor.
Currently, mobile money withdrawals are subject to a 0.5 per cent excise duty while agency banking and ATM withdrawals in commercial banks are not subject to the same tax.
The government is considering taxing cash withdrawals from commercial banks as it is with mobile money in a move to increase its revenue.
The proposal to tax cash withdrawals was reached at last week in a budget consultative meeting between the finance ministry and other stakeholders such as the Uganda Revenue Authority (URA), Uganda Communications Commission (UCC), telecom operators and Bank of Uganda (BoU).