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The Finance Committee of Parliament has backed the government proposal to impose a 0.5% excise duty rate on the value of the transaction on payment services of cash withdrawals through agent banking.

They reasoned that such a move would ensure equal distribution of the tax burden amongst all Ugandan taxpayers, instead of limiting it to only mobile money users.

“The proposed amendment is intended to provide for an equal tax treatment to that of mobile money for payment services that offer a similar service to mobile money. These payment services include Chipper Cash and Wave Transfer. At present, withdrawals from these services are not subject to the same excise duty as that levied on mobile money. This is because the current law levies the tax on telecommunication companies which those being targeted are not,” the finance committee chairperson Amos Kakunda said on May 6, 2024.

“This proposal seeks to remedy this unequal tax treatment by including these in the realm for taxation. Enhancing equity and fairness by including all major electronic wallet platforms as the tax burden on Ugandans-current tax burden would be distributed evenly creating a level playing field and providing an expanded tax base resulting in increased Government revenue," he added. 

This, he said ensures a 'same service, same rules approach' and incentivizes continued growth of digital financial services while still contributing to the overall tax effort.

This approach promotes both financial inclusion and responsible tax collection for the benefit of all Ugandans,” Kankunda justified.