Mobile Money Tax: A complete list of all taxable financial services

mobile money tax

While some level of taxation is necessary to fund government operations, excessive tax can have negative consequences. This could be what Ugandans are felling with the mobile money tax, that went into effect starting July 1st, 2018.

According to the tax proposals contained in the Excise Duty Act of 2018, “A tax of 1 per cent of the value of the transaction will apply on mobile money transactions on receiving money, sending money, making payments and withdrawals of money”. This precisely means that 1 per cent of the value of your money will be deducted every time you use your mobile money account.

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The transactions affected by the mobile money tax are numerous, and we are listing them down for you to understand.

Sending Money

When sending money to someone registered to use Mobile money services, they will incur the 1% levy on the money they receive. For example, if you send them UGX 10,000, they will receive UGX 9,900. the amount is not taxed as according to the ammendments.

Cash in and cash out

When you deposit an amount onto your mobile money account, or receive money from someone, the 1% tax is deducted from that amount and thus you receive less, it is not taxed as according to the ammendments. When you withdraw that money from your account, a withdraw charge is imposed in addition to a 1% 0.5% withdraw tax.

Related Post: Understanding Mobile Money Tax in Uganda. What it cost before and Now

Paying for Goods and Services via Agents

Once you pay for something via a merchant, 1% tax is deducted from the amount they receive, it is not taxed as according to the ammendments. This applies to bank agents, mobile money agents, and business entities that receive payment via mobile money.

Paying for Utilities

If you pay to UMEME for Yaka, NWSC for water, and any other utilities; the 1% will be deducted from the amount that they receive. the amount is not taxed as according to the ammendments. This also applies for Pay TV, for schoo fees payment, lotto and sports betting, as well as video-on-demand services like Kwese iflix.

Mobile Loans

When you want Airtel Weeole or MTN MoKash to address you with a loan, a 1% levy will be imposed on the amount that you receive, and another tax will apply when you are paying back – whether at once, or in installments, the amount is not taxed as according to the ammendments.

Financial Services

When you move money from your mobile wallet to your bank account, to NSSF, or SACCO account, it is not taxed as according to the ammendments. As well, when you withdraw from your bank account or SACCo account through an agent, you will have the amount deducted by 0.5%.

Receiving money from abroad via mobile

When you receive money from abroad through servers like World Remit, the amount you receive won’t be taxed.

Tell us what you think about the mobile money tax, and the OTT tax.