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Mobile money tax was passed in error - Kasaija

By Maria Wamala

Added 5th June 2018 12:11 PM

The minister however said that it is okay to tax mobile money as long as the tax rate is affordable by the tax payers

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The minister however said that it is okay to tax mobile money as long as the tax rate is affordable by the tax payers

Finance minister Matia Kasaija addresses the press at the Ministry of Finance offices in Kampala. Photo by Maria Wamala

Finance minister Matia Kasaija has apologized for the 1% tax levied on mobile money that was passed recently by Parliament, saying that it was passed in error.

“The NRM caucus and Cabinet sat and agreed on 0.5% instead of 1%. I don’t know what happened,” he said.

Last week, Parliament passed a 1% tax on mobile money as part of the Excise Duty amendment Bill. The opponents of this tax say that the 1% tax on mobile money will hurt the economy, its people and it is counterproductive.

“I am sorry. I was out of the country when it was passed. I will have a discussion with the President and maybe by the time I read the budget next week, a solution will have been found,” Kasaija said.

Mobile Money tax not bad

However, Kasaija said that it is okay to tax mobile money as long as the tax rate is affordable by the tax payers.

On this note he said that Cabinet had also resolved that the tax be charged on the mobile money system providers because that is where revenue is, not on money transactions as passed by Parliament.

Government intends to raise sh150b from taxing the mobile money service; the biggest financial inclusion tool in Uganda, benefiting about 20 million Ugandans.

While addressing the press at the finance ministry headquarters in Kampala about activities of the budget week, he said that the 2018/19 national budget will be presented on June 14. 

Not revealing details, Kasaija said government will present a budget of sh32.7t themed; ‘Industrialisation for Job Creation and Shared Prosperity’ and that will prioritise infrastructure development.

“We took a decision to give priority to infrastructure including; transport, energy and ICT sectors. We believe this is the best way to create a firm foundation for our economy and for lowering the cost of doing business in the country,” he said.

However, the civil society criticised government for misleading the budget cycle by habitually making supplementary budgets for avoidable items like salaries and special meals.

The executive director of Civil Society Budget Advocacy Group, Julius Mukunda, proposed an amendment to the Public Finance Management Act 2015, to have supplementary expenditure confined to the Contingency Fund.

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