CSBAG OPPOSES GOVERNMENT IMPOSITION 0.5 TAX INCREASES ON MOBILE WITHDRAWALS

The Civil Society Budget Advocacy Group-CSBAG
has challenged Government imposition of 05 taxes increase on mobile mobile transactions; saying the alleged increase would have a negative effect on mobile money transactions and subsequently affect the mobile Mobile business which is not only gaining popularity but also becoming an easy method of doing business in Uganda and East Africa as a whole.

The Executive Director of csbag;Julius Akunda while addressing the Media at his offices said;the figure is baseless and does not serve the budget needs government is struggling to address.

He also says that the tax was imposed on the rest of the population without consulting the technocrats who should not have left out during the process.

Yesterday, the Minister of Information Communications and Technology, Frank Tumwebaze said that cabinet had approved a proposal to reduce the Mobile Money tax from 1% to 0.5%.

Cabinet also proposed that the tax only applies to withdrawals and not deposits and transfers.

Speaking at the same event the State Minister for Finance David Bahati said that government expects to collect 115 Billion Shillings from the 0.5 per cent tax on Mobile Money Withdrawals.

The Minister also reported that government had collected 5 Billion Shillings from Mobile Money taxes since the inception of the taxes on 1st July.
government was not prepared for the Mobile Money Tax taxes imposed to the final mobile money user.

He also challenged the 0.5% tax proposed by Cabinet on the value of Mobile Money withdrawals;the mobile money increase would affect the way of doing

The money tax,follows the government effort in early 2018 to broaden its tax base, reduce reliance on foreign aid, and extract revenue from the rapidly growing digital financial sector.

said that the figure is baseless and does not serve the budget needs government is struggling to address.

He also says that the tax did not originate from a technical person.

Yesterday, the Minister of Information Communications and Technology, Frank Tumwebaze said that cabinet had approved a proposal to reduce the Mobile Money tax from 1% to 0.5%.

Cabinet also proposed that the tax only applies to withdrawals and not deposits and transfers.

Speaking at the same event the State Minister for Finance David Bahati said that government expects to collect 115 Billion Shillings from the 0.5 per cent tax on Mobile Money Withdrawals.

The Minister also reported that government had collected 5 Billion Shillings from Mobile Money taxes since the inception of the taxes on 1st July.

Mukunda says that a study carried out by CSBAG indicates that since for the two weeks when the 1 percent tax was imposed, mobile money agents lost 40 percent of transaction volumes and 23 percent of revenue from transactions.

Parliament will on Thursday review the Excise Duty Amendment Bill, 2018 that introduced a 1% value tax on Mobile Money transactions and 200 shillings access tax on Social media.

Civil Society Organizations say the 0.5% tax on Mobile money is still a burden for the vulnerable Ugandan populations. They say government should do away with it and resort to other tax generating items.

The Programme Manager of the Southern and Eastern Africa Trade Information and Negotiation (SEATINI-Uganda) Regina Navuga says government should instead reduce on tax exceptions and introduce new taxes in the informal sector.