KAMPALA – The ruling National Resistance Movement Caucus on Monday resolved to back the Excise Duty Amendment bill (2018) No. 2 that revises the Mobile Money tax from 1% to 0.5%.
The agreement was reached following a meeting at State House Entebbe chaired by President Yoweri Museveni.
The President summoned the ruling party MPs fearing that many of them might oppose the bill given that last week, many of them had supported the minority report prepared by opposition MPs that proposed scrapping the tax. Voting on the bill was suspended last Thursday and pushed to Tuesday, October 3.
Sources that attended the closed door Caucus meeting told this website that the President convinced members that 0.5% tax is a small fraction on a service effectively enabling transfer of money in the country.
The President reportedly told the legislators that sending money using the mobile money platform with the 0.5% tax is not equivalent to physically transporting it.
“Incurring a 0.5% tax on mobile money at withdrawal point does not cost much compared to physically transporting it,” President Museveni is quoted to have said.
He reportedly gave an example of using a bus to go to Arua and delivering money using Shs60,000 as transport to and from, compared to sending it using Mobile Money and only incurring the 0.5% tax.
The caucus position means that voting on Mobile Money tax is now a formality as Parliament convenes on Tuesday afternoon.
The MPs opposed to the bill contend that there is no law to regulate the use of Mobile Money; mobile money services are already faced with huge transaction fees and that the sector risks causing a surge in unemployment levels in the country once an unpopular tax is introduced.
The minority report presented by Nakaseke South MP Paulson Luttamaguzi last week opposed the tax and called for its total removal.
“A tax on these services is likely to reverse all the benefits brought by mobile money. It is necessary for Government to salvage the economy and drop this tax,” the minority report, which was signed by Luttamaguzi; Kachumbala county MP Patrick Isiagi and Moses Walyomu (NRM, Kagoma County), read in part.