Parliament has passed the Excise Duty (Amendment) Bill, 2018 that imposes a tax on mobile money transactions and access to social media platforms respectively.<\/p>\n
The bill was passed after a debate which drew mixed reactions from MPs across the political divide .<\/p>\n
The report from the Committee on Finance, Planning and Economic Development on the bill was presented by the vice Chairperson of the committee Hon. Loy Katali during a plenary session, Wednesday, 30 May 2018.<\/p>\n
The committee observed that money had migrated from traditional payment systems like banks to digital platforms like mobile money, thus the need to levy tax on such platforms.<\/p>\n
\u201cThe bill proposes to impose excise duty of one per cent on the value of mobile money transactions of receiving, payments and withdraws. Mobile money is an efficiency gain and should be taxed,\u201d Katali said.<\/p>\n
Some MPs, however, insisted that imposition of tax on sending, receiving and withdraw of money using mobile money services would be detrimental to low income earners who depend on the service.<\/p>\n
\u201cIn my constituency, there is no bank to offer financial transactions to the locals so they depend on mobile money. If you impose this tax, how will people in rural areas keep their money?\u201d queried Hon. David Abala.<\/p>\n
\u201cThe one per cent tax on mobile money is going to reduce financial inclusion which we are seeking as a country for the most vulnerable in society,\u201d added Hon. Monicah Amoding.<\/p>\n
Some MPs on the other hand gave a node to the bill noting that it would improve the country\u2019s revenue collection and enable payment of outstanding loans .<\/p>\n
Hon. Maria Ann Nankabirwa said that the one per cent levy on mobile money is a service gain. \u201cHow will the loans we have be serviced if we do not have the money for them,\u201d she said.<\/p>\n
The Leader of the Opposition, Hon. Winfred Kiiza said Ugandans needed services that could be catered for through tax revenue, noting that some companies had been exempted from paying corporate tax.<\/p>\n
\u201cOnly five million Ugandans countrywide can access the banking sector leaving the rest to mobile money services. Why not increase taxes on tobacco and sachet Waragi which is killing our people?,\u201d Kiiza said.<\/p>\n
The Chairperson of the Committee Hon. Henry Musasizi noted that an exemption for corporation tax on companies was not wasteful but rather depended on the purpose for which it is given.<\/p>\n
\u201cSome companies grow internally by ploughing back profits; others by borrowing money and others through acquisitions and mergers,\u201d said Musasizi.<\/p>\n
State Minister of Finance (Planning), Hon. David Bahati said profits from mobile money were growing thus making the service a good avenue from which to derive tax.<\/p>\n
\u201cThe tax measures have been evaluated and we have considered the low income earners,\u201d Bahati said.<\/p>\n
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