Uganda Passes Mobile Money Tax With Mistakes, Says Finance Minister

June 6, 2018 Taxation in Uganda

Mobile money UgandaKAMPALA – Uganda has gone ahead with its controversial 1 percent mobile money tax, but the finance minister claims that the rate and target of the tax was approved by accident.

Uganda has passed a new tax on mobile money transfers, however, the national Finance minister Matia Kasaija has said the passing was made by mistake.

Under the newly passed tax, transfers made using a mobile money system by a taxpayer in Uganda will be liable for a tax of 1 percent of the value of the transfer.

Mobile money is a popular financial tool for individuals who do not have access to traditional banks and banking facilities.

Taxpayers using mobile money can send or receive payments almost instantly using their mobile phones.

The Finance Minister has now claimed that the initial agreement between the ruling political party and the Cabinet was to pass a tax with a rate of 0.50 percent, and not the 1 percent seen now.

He added that the tax should have been charged to and paid by the providers of the mobile money service, instead of the end-user.

Opponents of the tax believe that any moves which reduce the affordability of the mobile money systems will be detrimental to the country and will lead to reduced financial inclusion in Uganda.