The State Minister for Finance, David Bahati yesterday told parliament that the Mobile Money tax Law would be gazetted Friday and there after new rates on Mobile Money tax take effect.
Should this happen, Ugandans will now pay 0.5 per cent on taxes during Mobile Money transactions instead of the initial 1 per cent as had been stipulated in the previous Bill.
President Museveni recently signed the new Bill into law, but this did not stop telecoms from drawing the phased out 1 per cent tax on mobile money.
However, following pressure from fellow members of parliament, Bahati was summoned to the floor where he ascertained the Law will be in effect starting Friday.
“The President assented to the Bill in the period as indicated in the constitution, and the law will be gazetted tomorrow (Friday) and then the effectiveness of the Law will also start tomorrow,” Bahati said.
Last month, Parliament approved the Excise Duty (Amendment) (No.2) Bill, 2018 effectively reducing the mobile money transaction tax from 1 to 0.5 per cent.
Before the amendment, the bill that came into effect this year, received countrywide condemnation, putting several transaction agents out of business after customers abandoned the popular and convenient payment method. President Museveni tasked Prime Minister Ruhakana Rugunda to table an amendment to the bill that would reduce the tax from 1 per cent on all mobile money transactions to 0.5 per cent.
At least 154 MPs are required to pass a bill into law. State minister for Planning, David Bahati, said government intends to collect Shs 115 billion from the mobile money transaction tax to finance part of the FY 2018/2019 budget.
Despite attracting protests from some members of parliament and the public, 164 MPs voted in favour of the tax against 124. A total of 288 out of the 458 MPs in the tenth parliament participated in the vote presided over by the deputy speaker of parliament, Jacob Oulanyah.
Meanwhile, In July, President Museveni directed that all those people whose Mobile Money tax deductions had been made on the basis of 1 per cent be refunded. Museveni said the figure of 1 per cent came up by mistake.