The National Resistance Movement (NRM) party Parliamentary Caucus has backed a cabinet decision to revise the 1 percent tax on mobile money withdrawals.
The MPs who met at State House Entebbe on Wednesday evening also backed a decision to retain Over The Top (OTT) tax on social media platforms.
A cabinet sitting on Monday agreed to reduce the tax imposed on mobile money withdrawals to 0.5 per cent. The cabinet also resolved to maintain the daily Over The Top (OTT) tax ahead of a plan to re-table the Excise Duty (Amendment) Bill before Parliament.
Addressing Journalists on Tuesday, the ICT Minister Frank Tumwebaze communicated that cabinet had approved the amendment of the Excise Duty Act, and directed the Minister of Finance Matia Kasaija with the Attorney General William Byaruhanga to prepare an Excise Duty (Amendment) Bill, 2018 to be tabled before Parliament on Thursday.
With pressure increasing from sections of the public against the taxes and MPs clearly divided on the matter, President Yoweri Museveni called the majority NRM legislators to State House, Entebbe to harmonise their position.
Solomon Silwany, the Deputy Chairperson of the NRM Caucus said that the they had agreed to back decisions made by cabinet on both tax measures.
“We maintained the 200 Shillings daily tax on Social Media exclusive of students and people doing research,” said Silwany.
Sources that attended the Caucus meeting say that arguments by students being hindered to carry out research by the tax were ruled out since cable internet is not taxed and is used in higher institutions of learning.
The mobile money and social media taxes, came in to effect on July 1. The government on Tuesday announced that 7 billion Shillings had been so far collected from the new tax on social media and mobile money transactions just a week into the new financial year.
State Minister for Planning, David Bahati says that even with the reduction of 0.5 percent on withdrawals only, government will still raise 118 billion Shillings which is slightly above the 115 billion Shillings that was initially estimated.
According to Bahati, about 11 trillion Shillings is sent via mobile money platforms while 23 trillion Shillings is withdrawn every month.
“Nothing in the budget will suffer after reducing the tax from 1 percent to 0.5percent because transaction of 23 trillion will raise Shillings 118 billion. We had budgeted for Shillings 115 billion. The same measure of 1 percent will raise the same amount that we had actually budgeted for. Now that we have proper statistics, 0.5per cent will raise 118billion,” Bahati told journalists on Tuesday.