The excise duty bill is getting a face-lift. Whether it was an error, or allegations that the Government succumbed to pressure from the public remains a mystery. Well, we are not here to discuss conspiracy theories, if there is anyways.
The President admitted that he signed the law with the error because they could not delay the other measures. However, he assured that the error would be corrected when Parliament reconvenes.
While addressing the press, Hon. Minister David Bahati said the the amended Excise Duty Bill will be presented to the house on Thursday. Mr. Bahati is the Minister of State for Finance, Planning and Economic Development (Planning).
17/7/18
3.Cabinet approved Amendment of the Excise Duty Act, 2015 & directed the Minister of Finance, Planning & Economic Dev't in consultation with Attorney General to Prepare an Excise Duty (Amendment)Bill, 2018 to be laid b4 Parliament by 19th July, 18 #UGCabinetResolutions— Ministry of ICT&NG (@MoICT_Ug) July 17, 2018
So what’s great about the amended Excise Duty Bill?
In the amended Excise Duty Bill, 0.5% and not 1% will be charged on sending and withdrawal of money. However, the 1% tax initially charged on deposit has been scrapped off. Consequently, the President ordered telecom companies to refund customers who had been charged the 1% tax. We opined on why the tax was reduced from 1% to 0.5%.
17/7/18
3. The Excise Duty Amendment will include;
(i) Reduction of tax payable on the value of Mobile Money transactions from 1% to 0.5% on withdrawals only ii)the Excise Duty on OTT at 200/per day of access will continue & Improvements to payment options #UGCabinetResolutions— Ministry of ICT&NG (@MoICT_Ug) July 17, 2018
However, the heartbreaking news is that the OTT Tax shall remain on course. The only wonderful disclosure is that they are working with telecoms on modalities of paying it conveniently. At present, the only mode of paying OTT Tax is through mobile money wallets using the official USSD codes we discussed here.
The initial goal was to raise UGX 115 billion on billions. However with the amended excise duty bill, UGX 118 billion will be realized on withdrawals. So technically, the Government still wins, even after reducing the burden on its citizens.
If passed by Parliament and assented to by the President, the Bill will become a law. More so, a refund will be implemented quickly since this was done in error.
Hopefully, this will induce a sigh of relief and improve the mobile money market which started nose diving after the tax was implemented.
