On Thursday 15th November 2018, state Minister of finance David Bahati assured Parliament that the new mobile money tax would become effective Friday 16th November.
MTN Uganda has today implemented the new mobile money tax on mobile money transactions. The new tax shifts from the initial 1% to 0.5% on withdrawals only.
This move follows the assenting of the Excise Duty (Amendment) Act (2018) into law by President Yoweri Museveni.
The revised Act reduces the tax that went into effect on 1st July 2018. However, it also limits the application of the tax to only withdrawals from the customers’ mobile money wallet.
New mobile money tax is only on withdrawals
Consequently, the tax will not apply to other forms of mobile money transactions such as payments, sending and receiving money. The had already scrapped off the tax from deposits. MTN shall not tax customers when they buy airtime and bundles using MTN MoMo.
The tax caused a public out cry. Many referred to it as inconsiderate and deserted the mobile money services. MTN’s hope is that the reduction in the tax will bring back mobile money customers who had been discouraged from using the service due to the high cost of the tax.
We believe that mobile money has greatly accelerated financial inclusion by overcoming access to money barriers. It also further promotes business, trade and commerce especially within the informal sectors of the economy and rural, hard to reach parts of Uganda which have no access to formal financial services.There is no more tax when sending or receiving money and making payments.