Economic insecurity in Uganda...The ugandan government scraps off tax on mobile money deposits.
The Mobile money business was introduced in Uganda in 2009 and has for the past years been doing well in the country.
However,1st July 2018 saw the Ugandan government effect the payment of the long speculated mobile money tax alongside the social media tax on its people, A tax that was passed by the Ugandan 10th parliament in earlier the this year.
This tax has however seen the government receive criticism from its citizens condemning the government for passing a tax many have regarded as unfair to its citizens . Many have also termed it as an attack on mobile money business in the country which intends to rule out mobile money out of the country to favour the bank.
Well, this mobile money tax is a 1% tax which is charged directly on any mobile money transactions carried out via any mobile money account. The tax is charged as below------1% tax charge on cash deposits on mobile money account. Another 1% is charged incase one sends money to another account. And lastly government also deducts another 1% from the same money at time of withdrawal, not forgetting that the Mobile money Agents/dealers have to deduct there separate charges from the same account. This tax has caused an outrage countrywide as many people have come out to openly fight against it and make pleas to the government to revise this move to tax mobile money
The Uganda government after a review on this outrageous tax has managed to comeout and scrap off the 1%charged on the mobile money deposit saying it was effected in error. David Bahati, the Ugandan finance minister issued this to the Ugandan community and noted that the deposit tax was an error and wasn't meant to be in the first place therefore an adjustment has been made and the tax on the mobile money deposits done away with.
Important to note is the fact that 1% on withdrawals and 1% sending money stays.
Well, Is the scrapping off of just the tax on the deposit enough for the crying Ugandans or do they need the entire tax on mobile money to be scrapped off? To what extent is the remaining tax affecting the mobile money business anyway and how much has scrapping off that on the deposits saved?
A question on the the minds of Ugandans is, are there any compensations for the persons who had already been charged with this mobile money deposit tax or they go in vain.
Shockingly another contravesy about this tax has been portrayed in the statements issued earlier today by the president who pointed out that the Mobile money tax is supposed to be 0.5% not 1%. This raises alot of questions too in the Ugandan minds.
With this mobile money tax, has the Ugandan government failed it's citizens? Has the 10th parliament betrayed it's people? Are there any other cheaper ways the government can attain income (tax) from its citizens without affecting the mobile money busines or without hurting it's economy?