The infamous mobile money tax came into effect on July 1st 2018. Since then, it has been the center of public debates. However, the President came out to clear that the tax wasn’t actually 1% but 0.5% of the transaction value. Government further went on to scrap off the tax on deposits.
Today, the president has come out with some really brilliant news, maybe it will force a smile on a few people. Museveni has ordered that all people that were charged 1% tax be refunded.
“Why was there confusion about 1 percent and 0.5 percent and charging mere deposits on mobile money accounts which were not supposed to be taxed? It is because this was a new tax and people were not uniformly understanding what was involved,” said the President.
The refund will take effect after amendment of the law, reducing the 1% figure to 0.5%.
The Mobile Money Tax was signed in ‘error’
“I signed the law with the error because we could not delay the other measures. However, Parliament, when it reconvenes, will be requested to correct it. The ones whose deductions had been made on the basis of 1% should have their money reimbursed.” Museveni wrote.
So many discontented individuals stormed the President’s Facebook page raising concerns about the ripple effects of the tax. They also sought to find out how the revenues from the tax will be used.
However, Museveni didn’t mention the exact use of the revenue but reiterated that the country badly needed the revenue.
“Mobile money transfers have brought to the surface the big volumes of money that are moving around the country. Each day US$ 52m moves around in the form of mobile money. This is about US$ 19bn a year. Much of this money is by big people; but, of course, some of it is by, economics-wise, small people. Therefore, in an effort to have self-sufficiency in budget, this is a convenient source we should not over- look.” he added.
However, ordinary Ugandans and activists have protested the tax since it took effect. They have argued that this is double taxation and an injustice to the people.
Museveni however emphasized that the 0.5 is just a small percentage that the state takes away to balance it’s budget.
