What happens when you charge a tax in ‘error’? Apparently, you refund it. Telecoms have surrendered over UGX 2 billion in Mobile Money Tax refund charged in error. Following the implementation of the Mobile Money tax on July first, some amendments have been made in the Excise duty Bill. The new law scrapped off Tax on deposits and reduced the 1% mobile money tax to 0.5%
If you’ve been following news this past month, you have probably noticed that there was always something about Mobile Money tax. On the morning of July 1st, mobile money users woke up to a 1% charge on every mobile money transaction.
However, President Museveni later clarified that there was a miscommunication. He added that Cabinet had not instituted tax on mobile money deposits. He also noted that they had agreed to a tax of 0.5% per cent on withdrawals instead of the 1%.
Consequently, he ordered telecoms to refund made basing on the error. This included a tax on deposits and bank to mobile money transfers.
Mobile Money tax Refund
The weekend marked the first mobile money tax refunds. Telecoms made mobile money tax refunds for certain periods. Speaking to Daily Monitor, Mr Val Okecho, the MTN communications and corporate affairs manager, said they had already refunded UGX 1.27b to various customers. These customers had transacted during the period in which the erroneous percentages applied.
“We have notified our customers and we have [refunded] UGX 1.27b which was broken down to a proportion of what each one was taxed.” he said.
Also, Airtel has reimbursed Airtel Money subscribers who had transacted between July 1 and 4. The Airtel MD said. “The reimbursement follows a directive from URA which states that the 1% Excise Duty previously charged is not applicable to the aforementioned amendment 2018”. However, Airtel did not reveal the actual amount of Mobile Money tax refund. But sources close to the company point to a figure of about UGX 1b.
Africell at the moment hasn’t effected Mobile Money Tax refund. However, Mr Edgar Karamagi, the Africell public relations manager, said they are in the process of making the refund. “We are yet to make refunds in respect to mobile money tax[on] deposits. But it is in the pipeline and we shall communicate when and the details to our customers,” he said.
