'Instead of taxing mobile money and social media, Government should instead scrap off the tax holidays from multi-national companies who will in turn widen the country’s tax base'
PIC: Parliament Speaker, Rebecca Kadaga has called for expeditious review of the taxes to harmonise the existing law along with current demands
Businesspeople and social media activists have proposed the introduction of taxes on land and on mutli-national companies.
This would ultimately replace the mobile money and social media taxes which hit particularly the poor pushing them deeper into poverty.
“Land is a hot item in Uganda. If Government for example came up with a tax on it, people will not feel the pinch because those that seek to buy land already have the money. Both the buyer and seller of the land can reach an agreement on how payment should be made and it will not be a big deal,” said Willex Mugisa, a member of the National Union of Disabled Persons of Uganda (NUDIPU)
Mugisa made the remarks at a stakeholders/citizens press conference on the effects of mobile money and over the top services tax in Kampala on Sunday.
The event was organised by the Southern Eastern Africa Trade Information and Negotiation Institute (SEATINI whose mission is to strengthen stakeholders’ capacity to influence trade, fiscal, and related policies and processes through information generation, dissemination, advocacy, alliance building and networking.
Ugandans go without adequate meals almost every day due to lack of money.
Habib Kisingo, a mobile money agent from Gulu, said instead of taxing mobile money and social media, Government should instead scrap off the tax holidays from multi-national companies who will in turn widen the country’s tax base.
“These companies are big and have the economic muscle to help build our nation. This would be a better option than milking money from a struggling poor person,” he said.
Last month, Parliament approved the Government’s proposal to levy a 1% (now 0.5%) tax on all mobile money transactions and the daily sh200 over the top (OTT) services on social media, causing public uproar and protests from pockets of critics.
Consequently, Parliament Speaker, Rebecca Kadaga, called for expeditious review of the taxes to harmonise the existing law along with current demands.
Her directive followed a commitment by the Prime Minister, Ruhakana Rugunda, that the Government would soon table amendments to the law. He assured the house that Government would present to parliament an amendment of both taxes in regard to the views from the general public.
Ben Kamyuka, the spokesperson for the Kampala Mobile Money Dealers Association, said before the introduction of the 1% tax (now 0.5%), the Government was already charging 6% (increased to 10% in FY 2018/19) withholding tax from their commissions.
He, however, noted that since the tax was introduced, many agents have not been able to get commission as previous customers have now resorted to moving with their monies in their pockets.