Finance Minister Matia kasaija has promised to get back to parliament to lower the Mobile money tax to 0.5 per cent.
The tax which was passed as part of the Excise Duty amendment bill in parliament last week has been labelled as regressive and dangerous to financial inclusion by its opponents.
Speaking to the press this morning Kasaija said that cabinet had approved a 0.5 percent tax but parliament had gone ahead to pass a 1 percent tax while he was out of the country.
Government envisages rising at least 115 billion shillings from taxing the service.
Mobile money is the biggest financial inclusion tool in Uganda pooling nearly 20 million of Uganda’s 34 million population on it.
It is these figures that have attracted the eye of the taxman.
Kasaija says that government has been cash strapped and in desperate search for revenue streams. He told the press that they are also looking into increasing their target to rental tax.
Uganda Revenue authority collects at least 13 trillion shillings of Uganda’s ambitious 32 trillion shillings’ budget. Faced with a growing debt burden and constrained borrowing potential, government’s tax abilities are now in display.
Civil Society Budget Advocacy Group leader Julius Mukunda told NilePost that the tough mobile money tax could slow down access to financial services and cripple key sectors like agriculture and education.
The budget will be read to the nation next week and it is earmarked to be 32.4 trillion shillings, which is 3 trillion shillings more than the previous one.
