Court drops Mobile money tax case against telecom companies

A suit against three telecom companies including Airtel, MTN and Africell by concerned Ugandans challenging charging of  a tax on mobile money deposits has been dropped by the High Court in Kampala, the Nile Post reports.

On July 1, a one percent levy on all mobile money transactions by government came into effect prompting two concerned citizens to drag Uganda Revenue Authority and the three telecom companies to court for unlawfully and illegally charging a one percent levy on mobile money.

On Monday, lawyers representing the tax body told the High Court that it was only prudent that the telecom companies be scrapped off the suit and the case against them dropped because they were only implementing orders from government.

“The telecom companies only do what they are told by URA and it would be wise that the matter is between the applicants and the tax body because the three respondents are only enforcers,” lawyer Ronald Baluku told court president over by Justice Musa Ssekaana.

In response, the applicants’ lawyers led by Eron Kiiza accepted that the telecom companies were acting as agents for URA.

“It is the first respondent (URA) that gave the misinterpretation of the contested mobile money deposits,”Kiiza told court on Monday.

“We ask that the second, third and fourth respondent be withdrawn from the suit.”

Justice Ssekaana subsequently accepted to drop the case against telecom companies.

In their application, the two concerned Ugandans had requested court to issue an order requesting telecom companies to reimburse all the money deducted on mobile money deposits.

On Monday, both parties agreed that the request had been overtaken by events and reached an agreement to have it withdrawn from court.

“We no longer think it can serve its original purpose,”Kiiza said.

On July 13, Museveni in a statement said that Ugandans who had  paid the one percent mobile money tax be refunded as the same had been  passed by parliament and signed by him in error.

He insisted that the correct figure was 0.5 percent and government later scrapped tax on mobile money deposits.

Telecom companies later refunded the money that had been levied on their customers’ mobile money deposits.

According to statistics from Bank of Uganda, there are 22 million mobile money subscribers in the country.