Parliament has rejected the proposal to expand the Excise duty to cover digital financial services.
Despite the Finance Committee’s recommendation to include Excise duty on withdrawals made through financial technology services, parliament rejected the proposed amendment.
The Ministry of Finance, Planning and Economic Development proposed that the application on Excise duty be expanded to cover financial services at a rate of 0.5 per cent of the value of the transaction.
This meant that for every withdrawal of cash through financial technology services provided through digital or online technologies, one would incur a 0.5 per cent levy.
However, parliament argued that the move would be detrimental to the growth of the digital financial services industry and would be an unnecessary burden on consumers.
Meanwhile, the House maintained Excise Duty on Opaque Beer and introduced an ad valorem Rate on drinking water.
The committee recommended maintaining excise duty on opaque beer while reducing excise duty on alcoholic or non-alcoholic beverages locally produced, excluding kombucha, to 12 per cent or Shs250 per litre.