Speaking to the press yesterday, minister of ICT & Information Hon Frank Tumwebaze confirmed that Parliament had voted out the 1% mobile money tax in favor of a 0.5% amendment against a move by the opposition to fully scrap off a tax that Bank of Uganda previously regarded to as a dangerous policy. However, when a member of our team tried to withdraw money today, URA deducted a 1% tax off the transaction implying the 0.5% policy has not taken effect yet.

What next after the 0.5% mobile money slash

As much as everyone hated mobile money services from the day Government lashed out to telcos in a bid to improve the then 1% tax amidst massive VPN downloads countrywide. The effect of the 0.5% may still negatively impact various customers away from relying on the service for all transactions as the story has been for the past few months from July 2018.

Although 0.5% is the new tax bounty on withdraws only and excluded on sending and mobile money payments. Over the top (OTT) services tax has no proposed amendments to either scrap off the UGX 200 or redivert the figure to data purchases. However, as mobile money tax now carries a 0.5% flag, we might see VPNs lose popularity with a similar cut off social media platforms.

As the distinct groom for change continues to overwhelmingly take over the policymakers. The president further stated a refund of illegal 1% taxes collected in favor of 0.5% only on account transactions excluding agent and bank deposits. Well, Telecommunication companies have flagged off the mobile money refunds drive with a headstart from Airtel Uganda followed by MTN that also issued refunds earlier today.

With the Tax on deposits norm: Airtel and MTN at the weekend started to refund tax deductions that had been charged on a number of mobile money deposits since the beginning of July. The money is being refunded directly to telephone numbers that could have been charged during the period with focus to deposits and the 1% sub-charges.

The progress of Telecom mobile money refunds

At the beginning of July, the ministry of finance stated that 1% tax will be charged on all mobile money transactions. However, as the president went ahead to alter the proceedings of the 2018/19 budget day. Only deposit charges have been refunded so far with no details of when the original 1% on other transactions will flag off with huge cashbacks to customers.

The mobile money tax drama and it’s expected revenue

Mobile money tax was ushered in on July 1st 2018. Since the, the Government has never looked back on choosing whether to proceed with implementing this tax more or consider the views of the people crying out loud for the high taxes imposed on a fast growing mobile banking side.

MTN Mobile money leading the highest revenue statistics followed by its one on one competitor Airtel money are set to bring in 18Bn shillings monthly to Government. Even though, the finance ministry urged all companies to refund the illegally collected taxes to customers. None of the two mobile money lords have refunded a single shilling by time of writing.

The fate of OTT Tax and Government’s plans for its in Uganda

VPN apps in Uganda are widely used for only one single reason which is to bypass social media tax currently similar to the 2016 presidental elections situation where the platforms were deliberatly blokced.

OTT tax or social media tax in Uganda was commented on as a tax that is for now not going anywhere given the many protests by opposition leaders against this tax as it still trends online. Among the few tricks UCC is reportedly working on is to block each and every VPN inorder to force users to spend UGX 200 daily on tax, a mesare that for now is unsuccessful. Therefore, all taxes remain intact and as the minister commented on Government’s measures, enough revenue has already been generated in less than 1 month from the 2018/19 budget flag off.

“We shall tax mobile money agents and telecoms, not the customers”. Minister Kasaija stated. Even though Parliament has already approved this form of tax on mobile banking we expect things to change since its only Uganda with such taxes levied on the day to day popular services.

Mobile money tax the new trick behind it

The 1% mobile money tax which we all thought was the new thing may soon get a new twist as the mister stated. 0.5% is the new rate at which transactions will be charged. According to the finance minister, it’s only mobile money agents and telecoms that will be charged.

We leave our hands crossed just weeks before the new national budget is passed that will as well include the rumored social media tax.