'We were not consulted on Mobile Money tax' - Mutabazi

TAX

KAMPALA - Although Uganda Communications Commission (UCC) is a key stakeholder in the implementation of the Mobile Money and Social Media tax, the technical team was never consulted during the drafting of the law.

The UCC Executive Director, Godfrey Mutabazi told MPs on the Parliamentary Committee on Finance that; had the technical team been consulted, they would have advised on better ways of charging it.

 "When the tax was introduced, as UCC, we were never consulted. There were so many ways we could have done it," Mutabazi said.

He told the Committee chaired by MP Henry Musasizi that although UCC supports the tax given the volume of money transacted through Mobile Money per day, it should be friendly and not painful to the ordinary Ugandans.

"For example, we should have hidden the Over the Top Tax (OTT) and not cut off people every day. But let's see how to improve it since it's already in the law. If you are not careful, you can crash the economy," he warned.

Mutabazi was appearing before the Committee to give UCC's views on the proposed reduction of the Mobile Money tax from 1% to 0.5%.

He added that according to the mobile money monitoring report, $50m is transacted through Mobile Money per day.

During the meeting, the MPs tasked Mutabazi to explain the issues of overcharging of fees by telecommunication companies, uncertainty on active phone users and unclaimed mobile money balances.

"The issue now is not whether we need it or not. The issue is about terminating it or reducing it to 0.5%. We also want to know where you put people's unclaimed balances?" he asked.

Mutabazi said mobile money is a new innovation that is currently regulated by Bank of Uganda though needs to be reviewed. "It's Bank of Uganda that deals with mobile money issues," he said.

Mutabazi however, decried lack of finances to the Information Communication Technology (ICT) sector.

"Although the ICT sector is very dynamic, we are not funded like other sectors. Our sector is majorly funded by private sectors especially by the telecommunication companies," he said.

On how beneficiaries can access their relatives' mobile money after death, Julianne Mweheire from UCC said they can apply to the telecommunication companies using a letter from the administrator general.

"This money is kept on an escrow account so when one dies, the next of kin can access it. But we are trying to put it clearly in the law," she said.

James Kakooza demanded to know whether mobile money is audited by Bank of Uganda.

Abdu Waswa,the UCC head of Legal explained that Bank of Uganda made an agreement with commercial banks that monitors the transactions of mobile money on behalf of the Banks.

"The commercial banks hold this money on behalf of the telecom companies. So the Central Bank audits it all the time," he said.