Uganda's Mobile Money Tax Controversy Continues

While President Yoweri Mseveni claimed in his blog that the approved mobile money tax was only 0.5%, only a formal amendment can rectify the "error" which set the amount at 1% of mobile money transactions. Uganda's Constitution states: "No person or body other than parliament shall have power to make provisions having the force of law in Uganda except under authority conferred by an Act of parliament." While there is consensus that the tax should have been 0.05%, debate among members of parliament continues as to how an amendment shall be accomplished as well as who was ultimately responsible for the passage of the bill

An explanation of how the 1% tax operates, in addition to the 15% excise tax on certain withdrawals - an increase from 10% - illustrates the potential impact such increases can have upon the poor and financial inclusion efforts. The furor has not died down with activists launching a campaign against both mobile money and social media taxes, criticizing not only the significant disorganization exhibited by government but the justification for the taxation without appropriate prior discussion. Sources within the mobile money industry are claiming that a substantial reduction in mobile money deposits and person to person transfers has occurred as a result of the bill and the uncertainty of its outcome.

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