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Campaign Against 1% Tax on Mobile Money Transactions Launched in Uganda

Civil Society Organisations (CSOs) under their umbrella organization Civil Society Budget Advocacy Group (CSBAG) have launched a campaign against 1% tax on mobile money and lobbied Uganda’s Members of Parliament.

Convinced members of parliament to show their support have promised to decampaign it and have appended their signatures onto a pledge book and have spoken out about the regressive tax.

Julius Mukunda, the executive director of CSBAG told lawmakers that the proposed 1% tax on mobile money is going to impact on government’s financial inclusion efforts. He said the proposed tax is going to hurt government’s financial inclusion programme and that would amount to wastage of resources.

He urged citizens to put pressure on MPs not to pass the tax proposal but embrace the CSO alternative proposal of increasing excise duty from 10% to 17.5% on withdrawal fees, which will generate UGX122b.

Mukunda emphasized that the civil society is not against taxation and expansion of the tax base but rather that the principles of taxation such as equity and fairness should be adhered to.

David Walakira, a Budget Policy Specialist with CSBAG while explaining the impact of the tax proposal, said it is going to cause shock waves in the economy because it will be taking money away especially from poor and vulnerable citizens.

Members of Parliament commended the civil society for coming up with such an innovation by empowering them with a fact sheet on how the 1% tax proposal is going to impact on households. They faulted the government for coming up with a tax proposal that is mainly targeting the poor and most vulnerable people.

Bwamba County MP Richard Gafabusa thanked the CSOs for coming up with a fact sheet, which will guide the Parliamentarians and help them convince others to ensure that this tax proposal is not passed.

Florence Namayanja, a Masaka Woman MP who represented the chairperson of the Parliamentary Forum on Public Finance Management urged fellow legislators to reject the tax proposal and pointed out that the tax would affect mostly women and children at the household level.

“It will affect information communication technology (ICT) and financial inclusion – it is regressive and unfair,” said Maxwell Akora the Aruzi County MP.

“Government is going for soft targets. It’s not a good tax for our country.“Why is government targeting the poor people and yet tax should be fair?,” asked Anthony Ssemuli the Mubende municipality MP who also urged who the government to concentrate on the legal framework instead of taxing the poor.

Gaffa Mbwatekamwa, the Kasambya County Member of Parliament suggested that a massive demonstration should be organized so that citizens march to Parliament showing their discontent about the proposed tax.

Civil Society was urged to do their bit by creating more awareness among the public and to take the campaign down to the Local Government level.

Rita Atukwasa the executive director of Institute Social Transformation said the relationship the rural poor had built using the mobile money application is going to be affected and therefore, the tax proposal should be rejected.

Tonny Muzira, a youth representative informed MPs that most youth don’t have bank accounts and only rely on mobile money and therefore the tax proposal will affect them.

Ronald Burolo from Mbale who works with FIDA-Uganda argued that the tax proposal is going to affect women and could cause girls dropping out of schools as they have been relying on mobile money to pay school fees.

The campaign against the tax proposal stems from the ministry of finance, planning and economic development proposing 1% tax on mobile money transactions paying and receiving in the financial year 2018/19 excise duty bill.

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