Mobile Money Transactions Increase After Tax Cuts

Written by: 
Sarah Ndagire


Business appears to be picking up again at different mobile money transaction points weeks after the tax on withdrawals dropped from 1 percent to 0.5 percent.

Journalism@Mak has visited different mobile money points in Kampala and has established that transactions have raised after the telecom companies put into effect the amended Excise Duty Act.

The amendment saw mobile money tax charges drop from 1 percent that was provided for when the tax provision was created in May, covering all transactions including depositing, transferring and withdrawing money on one’s mobile money account. With the changes, only 0.5 percent is charged on withdrawals.

Asiimwe Raymond, a mobile money agent at Wandegaya in Kampala now reveals that the move has seen his customers rise compared to the days the 1 percent was being charged.

‘’I am glad that my customers are increasing daily. From the 17th of November, the number is increasing ranging from 20 to 50 a day, compared the  previous days I would get less than 15 clients,” Asiimwe said.

The latest adjustments to the tax took effect on November 17 when all major telephone companies that offer mobile money service informed their clients.

Steven Mwanguhya, a mobile money agent  in Kibuli, commended the telecom companies for putting in much efforts to enlighten the mobile money clients about the changes through massive  adverts on radios and in newspapers. “They have put in much efforts to inform our customers about the reduction of the tax, I’m happy that the day ends with me making some good transactions of above 20 clients,” he says.

Pauline Atugonza, a retail shop owner and a mobile money user based in Kisugu, Kampala, told Journalism@Mak that the tax is fair enough for both the citizens and the government compared to the previous 1 percent. She said: ‘’0.5 percent is good, I don’t find it a big deal to pay tax of 500 shillings in the 100,000 withdrawn.”

It should be remembered that on the 30th of May 2018, Parliament passed the Excise Duty Amendment Act which forced 1 percent excise duty on mobile money transactions.

This saw a number of clients shun transactions due to the charges and according to statistics from the Bank of Uganda, transactions reduced by 672 billion shillings in the first two weeks of July 2018.