KAMPALA – Following the public uproar against the Social Media and Mobile money taxes, the Minister of Finance, Matia Kasaija is on Thursday July 19 expected to table the Excise Duty Amendment Bill No.2 2018 on the floor of Parliament.
This follows a decision taken by the NRM Parliamentary Caucus that agreed with the Cabinet’s position to have the 1% tax on all mobile money transactions reduced to 0.5% tax, while the Shs200 daily charge on social media maintained.
Parliament passed into law the Excise Duty Amendment Bill 2018 on 30th May 2018 that saw Government slap a 1% tax on all mobile money transactions with Government arguing that this would generate Shs115Bn. At the same time, Shs200 daily levy was imposed on the Over The Top services (OTT) like WhatsApp, Facebook and Twitter that would see government raise Shs284Bn.
The President then assented to the Bill on 12th June 2018, which Act came into effect on 1st July 2018 and was met with swift protest from the public. The NRM Caucus is said to have unanimously agreed to have the Shs200 levy on Social Media exempted on research so as not to affect research in the country.
It should be recalled that at the time of tabling the tax proposals, State Minister for Planning, David Bahati told the Parliamentary Finance Committee that the social media tax was to be exempted on research and study purposes, but The Finance Committee recommended to Parliament to have the tax slapped across, saying it would be hard for Government to know who is using social media for research or ‘leisure’.
Sources who attended the two-hour meeting at State House Entebbe revealed that President Yoweri Museveni made a presentation where he revealed that in 2017, Shs63Trillion was transacted through Mobile money, a figure he argued was twice 2018/2019 National budget, which is Shs32.7Trn.
Museveni is said to have told the NRM MPs that Government is supposed to follow where the money is but the 0.5% tax is to be imposed only at withdrawal.
However, MPs are said to have raised concerns over the conduct of Kasaija, who had accused MPs of introducing the 1% levy on mobile money, contrary to a position agreed upon by Cabinet, demanding hemakes a public apology over his remarks.
The meeting directed Kasaija to apologise to MPs and make a public apology to Parliament before the new amendments are tabled.