Mobile Money Under Tax Threat in Uganda

May 3, 2018 Taxation in Uganda

Airtel Money - mobile moneyKAMPALA – Taxes on mobile money could seriously dampen the uptake of modern financial technology and systems in Uganda.

On May 1st, at the launch of the Uganda Rural Challenge Fund, representatives of financial institutions in Uganda collectively claimed that the government’s planned tax on mobile money transfers will inhibit financial inclusion.

The government hopes to enact a tax of 1 percent on all mobile money transactions.

Mobile money and other cell phone-centric payment systems have proven to be popular in Uganda, especially among poorer taxpayers who do not have ready access to banks and other traditional financial tools and services.

Uganda currently has an estimated 20 million mobile money users, and the Uganda National Financial Inclusion Strategy 2017-2022 hopes to see the number rise to 50 percent.

However, it is believed that even a 1 percent tax on mobile money will make the platform too expensive for many people.

As there are no currently feasible alternatives to mobile money, it is feared that a push by the government to tax such platforms will not lead people to other solutions, and taxpayers lives may degrade in the process.