KAMPALA- Bank of Uganda has Wednesday August 1, opposed the introduction of the excise duty tax on mobile money arguing the tax is neither fair nor equitable and will deter the growth of the country’s financial Institutions.
Appearing before the Finance Committee of Parliament chaired by MP Henry Musasizi over the amendments in the mobile money tax that was re-tabled by government recently officials said that taxes affect the growth of financial.
The Bank of Uganda officials argued that imposing high taxes on nationals does not generally mean it’s an avenue of a country raising revenue also revealing that mobile money transactions declined by 672bn shillings in the first two weeks of implementing the mobile money tax.
At the same meeting, telecom giants, MTN Uganda revealed that it’s revenue has declined in the last 4weeks by 30 percent since the implementation of mobile money tax on July 1.
MTN Uganda’s Chief Executive Officer Wim VanHelleputte, told the committee on finance that the mobile money sector is just growing and slapping heavy taxes will cripple business.
The company now recommends for the withdraw of the tax since there is already 15% Excise Duty and 10% Withholding tax on the same service.
At the start of last month, government imposed a 1% tax on mobile money transactions, drawing protests from the public.
Civil rights groups have hit out at the new taxes saying that it is likely to affect lower-income citizens disproportionately.
Also two concerned citizens; John Robert Turyakira and Anthony Odur had petitioned High court challenging the one percent tax levied against Mobile Money depositors by telecom companies on orders of Uganda Revenue Authority.