Cabinet approves reduction of mobile money tax

Cabinet approves reduction of mobile money tax
The Finance, Planning and Economic Developments Minister, David Bahati

Cabinet has succumbed to pressure and agreed to amend the Excise Duty Amendment Act, 2018 to reduce the mobile money tax charge from 1 percent to 0.5 percent.

According to Information, Communication and Technology Minister, Frank Tumwebaze, Cabinet has directed the Finance, Planning and Economic Developments Minister, David Bahati to prepare the amendment bill in consultation with the Attorney General.

He explains unlike in the past, the mobile money tax will only be applicable to withdrawals. The Finance Minister is expected to table the proposed amendment to parliament by Thursday July 19th for discussion.

He however, says the amendment will not affect the social media levy.

Government had projected to collect Shillings 115 Billion annually with the implementation of the 1% tax levy on all mobile money transactions.

Finance Minister, David Bahati, says they surpassed their estimates in the first week of the implementation of the Social media and mobile money transactions.

He however, says the proposed amendment will not in any way affect the budget since they had considered challenges that could present with the implementation of the new taxes.

Government started implementing the Over the Top Tax (OTT) effective July 1, 2018 following the passing of Excise Duty Amendment Act, 2018.

The act provides for a Shillings 200 daily levy on each social media user and 1 percent levy on all mobile money transactions including deposits, transfer, receiving and payments.

The implementation of the taxes drew angry reactions from mobile money subscribers and social media users accusing government of double taxation.

The public outrage prompted President, Yoweri Museveni clarify saying there was a miscommunication in the implementation of the mobile money tax.

He explained that the tax shouldn’t be applicable on deposits on personal mobile money accounts. Museveni also explained that government only intended to levy 0.5 percent and opposed to 1 percent on the mobile money transactions.

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