Lawmakers retain tax on mobile money


Kampala. Ugandans will dig deeper into their pockets after Parliament last evening passed the contentious Excise Duty Amendment Bill 2018 No 2, approving a 0.5 per cent tax on mobile money transactions.
The levy takes immediate effect. In the House, 164 MPs voted by roll-call and tally to support the tax on mobile money while 124 voted against Clause 2 of the Bill that proposed the levy.

However, of 463 MPs who constitute Parliament, 288 voted, meaning that some 175 lawmakers were absent when the national assembly was making a critical legislation that affects a substantial population of Ugandans who use mobile money services.
Voting on the polarising Bill was not without glitch as an initial vote, conducted by show-of-hand, was rejected by the Deputy Speaker, Mr Jacob Oulanyah, who ruled that the vote was marred by misconduct, much to the chagrin of pro-tax MPs.

The Government Chief Whip, Ms Ruth Nankabirwa, Security minister Gen Elly Tumwine and Rubanda East MP Henry Musaasizi (Finance Committee Chairman) protested the fresh voting but Mr Oulanyah rebuffed their protests and insisted on a fresh vote.
Mr Oulanyah directed that a fresh vote be conducted by roll-call and tally. MPs supporting the 0.5 per cent tax on mobile money transactions won the roll-call and tally vote with 164 to 124 votes.
In the initial voting by show-of-hand, 136 MPs had voted to support the 0.5 per cent tax while 101 had opposed it. There were no abstentions in both voting.

In the second voting by roll call, 288 MPs voted out of the 463.
Ndorwa East MP Wilfred Nuwagaba moved a motion demanding that Clause 2 of The Excise Duty Amendment Bill be deleted and the tax on mobile money transaction be entirely scrapped.
Nakaseke South MP Paulson Luttamaguzi, who presented the minority report argued that the tax be removed in public interest.

In the first Bill, the government had initially proposed a 1 per cent charge on mobile money transactions but later backtracked and reduced it to 0.5 per cent after public outrage from different stakeholders in the industry who said the tax was unreasonable and stifling the most utilised financial services.

With both sides diametrically split, tempers flared as MPs opposed to the 0.5 per cent tax accused the government side of trying to rig the vote, triggering an angry verbal exchange that brought back sad memories of the brawls manifested in Parliament last year during the debate to remove the presidential age limits from the constitution.
Opposition and some MPs of the NRM were vehemently opposed to the 0.5 per cent tax, prompting President Museveni to summon the party MPs to State House Entebbe for a Caucus meeting where he made a final pitch in favour of the amendment to allow the levy.

Mr Museveni’s argument has been that the government projects to collect Shs115 billion to fund its budget.
In defence of the tax, Mr Museveni has argued that the government borrows to bankroll the budget “because many people who are supposed to pay tax do not pay.”
For the Shs32 trillion 2018/19 budget, Shs17.5 trillion will be raised from local taxes while Shs8.3 trillion will be acquired through domestic borrowing and the rest from external funding.


Agents react

Ivan Lubowa: “I have been in this business for six years but after the tax was introduced, the number of customers reduced from more than 20 to less than 15 per day and my commission dropped from Shs600,000 a month to Shs200,000.”

Betty Auma: “Customers had reduced because the tax was competing with withdrawal charges. Someone withdrawing Shs2m would pay Shs20,000 for withdrawal and another Shs20,000 as tax. I hope it will upscale the business.”

Emmy Kagame: “I do not expect any change because in the last few days, customers have reduced. Previously, I would make a profit of Shs600,000 a month but it has dropped to Shs300,000 and after paying taxes to Shs200,000.”

Diana Namatovu: “It is a better development because the one per cent tax affected our business. We would receive 90 customers a day before that tax, today we get between 40 and 60 per day.”
Edwin Ojambo: “I am happy that it pinched the MPs. Before the tax, many of them used to come here and they still come to interview us about its impact. They vowed to fight it because they felt the impact of the charges.”

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