Mobile money in Uganda was once portrayed as a fast-growing form of banking by the Bank of Uganda last year. However, a tide of events happened on the 1st of July when transactions were subjected to a mobile money tax which angered majority of the citizenry, who have threatened to escalate issues to court owing to the new taxes which were previously at 1% of every transaction. Now, the government has come out to clarify its stand on mobile money taxation, reducing the levy by half and also exempting certain elements.
Previously, If you attempt to send lets say UGX 1M, only UGX 955,839 will be the withdraw-able amount on the other side after both the telecom and govt levies are chopped off in transit. The gov’t expected target was to collect at least 5 Billion in this exercise. Mobile money users have protested to a point that court is set to witness a mobile money tax related case in its chambers.
New Exempted Mobile money Tax elements
Mobile money tax is actually 0.5% not 1% It was a mistake in Parliament and we shall correct it – Min Matia Kasaija to CSBAG
According to the Minister of Finance, Hon Matia Kasaija, the Government didn’t aim at collecting 1% tax off mobile money services but instead a small 0.5% per transaction as he asserted during a closed-door interview with Civil society budget Digest (a non-profit tax institution) officials. However, during the 2018/19 budget reading the dice rolled on a single dotted side with 1st July, as the tax was effected at 1% of every transaction. The gov’t with the tone changed is now planning to scrap off the mobile money tax but only on deposits.
No! 1% tax on Mobile money Deposits, What it literally means
This literally means that you won’t be charged on deposits made directly to your account from an authorized agent. On the other hand, all taxes remain intact and only deposits are exempted from being taxed. The rest will be charged at 0.5% of the value being transacted.
The tax body, Uganda Revenue Authority has also gone ahead to publish an official public notice directing all telcos to trash levies on mobile money deposits together with mobile to bank or vice versa deposits. Therefore, this means you wont also have to pay the now set 0.5% tax when depositing or receiving money from your Bank account. However, receiving and payments over mobile money will attract the 0.5% tax.
