A Quick Look Into The New Mobile Money Tax

Who hasn’t been concerned about the recently imposed tax on mobile money transactions in Uganda this year? Worried Ugandans have taken to the streets to sing off their qualms and dissatisfactions about this tax with a rather trending hashtag #THISTAXMUSTGO.

Some members of parliament have outrightly opposed the tax but all in vain. Just about yesterday’s sunrise, Uganda woke up to news of an Excise Duty Amendment Bill proposing a 0.5% levy on withdrawals made through Mobile Money. Welcome to Uganda!

As if the May decisions made in parliament were not enough; this is when the initial amendments in the law governing the Excise Duty were made. Ugandans got introduced to a 1% tax levy on sending and depositing as well as the withdrawal of money via the Mobile Money service.

This development was followed by several public statements in opposition to the Mobile Money Tax and was revisited and brought down to a 0.5% levy.

Bank of Uganda has expressed its worries on this new levy — that the 0.5% tax levied on withdrawals via Mobile Money is very much likely to have a down-size effect on the financial gains in the economic sphere of the country.

Quite frankly, this excise duty tax is not equitable to what the government says it will take care of, and is therefore likely to deter the progression of our financial institutions.

You want to stop imagining that Bank of Uganda’s observation was – that in the first two weeks which followed the implementation of these taxes, Mobile Money transactions dropped by Shs. 672 billion… From MTN Uganda, there was a 30% shrinkage of revenue at the event of the implementation of the tax on Mobile Money transactions.

What fairness is it to Ugandans who opt for paying their bills and children’s school fees via Mobile Money? A local low-income trader will be only penalised and squeezed into poverty with no scream or a cry that will be reckoned baseless and at worst, attract no attention to her succour. The tax seems to rather submit to unsolicited wishes of driving Ugandans to a more stinky poverty ditch.

Equality, one basic principle of taxation, does not seem to be observed by this tax. Uganda is a country with a sharp-edged status quo; too rich or too poor. Even after setting priorities, Ugandans have been subjugated by this unfair tax that demands the same percentage of money from both a huge business owner in Kampala and an old woman who has acquired a phone of Shs. 30,000 by painfully bending her already bent bones in her garden for a period of over 16 months.

The tax on social media can rather be escaped by VPN, but the Mobile Money tax has come to cringe the faces of both Mobile Money dealers and customers. Ugandans so far have been fair and upright citizens still doing Mobile Money and the noise about the tax has gone down.

The big question is, If this tax is worth the needle, shall Ugandans stop demanding for its accountability? It’s only the first year of this tax, let us all watch how it grows.