The tax on mobile money transactions contributed to a deficit of Shs 30.48 billion, Uganda Revenue Authority (URA) has revealed.
Effective July 1, 2018, a tax of 1% of the value of the transaction was to apply on mobile money transactions on receiving money, making payments and withdrawals of money according to the Excise Duty (Amendment) Act, 2018.
The Act attracted mixed reactions from the public and the act was re amended effectively reducing the mobile money transaction tax from 1 to 0.5%.
According to the tax collecting body URA, the levy still contributed to a deficit worth Ugshs. 30.48 billion.
While briefing the press on the half-year FY 2019/20 performance on February 6, commissioner general Doris Akol said that the deficit can be attributed to agency banking and other forms of withdrawal that the public resorted to following the passing of the tax.
“High value clients withdraw their funds from agency banking e.g. MTN has had drop of 36 percent in mobile money transaction values since the introduction of the levy on mobile money,” Akol said.
While defending Mobile Money tax in 2018, President Museveni claimed that “Mobile money transfers have brought to the surface the big volumes of money that are moving around the country. Each day US$ 52m moves around in the form of mobile money. This is about US$ 19bn a year,” he said.
Akol noted that URA has also collected Shs 9 trillion net revenue in the first six months of the 2019/20 FY. This is however short of the projected Shs 9.739 trillion.
According to Akol, the total domestic revenue collections during the period of July to December 2019 were Shs 5.673 trillion against a target of Shs 6.109 trillion.
URA however registered a positive growth in corporation tax of Shs. 195.35 billion attributable to Capital Gains tax, which supplemented the collections from normal, and arrears.
Akol noted that there has also been an increase in the volume of goods from the East African Community and COMESA member states by 44.2% fetching the country Shs 154 billion.