By George Aine
The Central Bank has agreed with the Ministry of Finance to support the proposed 0.5 percent Mobile Money tax they had condemned as discriminative.
Addressing the Parliamentary Committee on finance on Tuesday, the junior Minister for Planning, David Bahati said, BoU Governor and Ministry of Finance had agreed to support the 0.5 percent on Mobile Money.
The BoU Governor, Emmanuel Tumusiime-Mutebile who was with Mr. Bahati in the committee, didn’t object to the minister’s statement even after his staff condemned the same bill.
“Following the meeting you had with the staff of the Central Bank, we had a meeting in the ministry and a meeting with the Governor Central Bank, it was actually the [BoU] staff who attended this meeting [in parliament] … this is now the final position of the government. we are still standing by the tax measures and a reduction of [Mobile Money tax] from 1 percent to 0.5 percent.”
The BoU decision to back the 0.5 percent tax comes after the Central Bank technical team condemned last month as “discriminative” and even warned MPs that such a tax measure was likely to affect financial inclusion in the country.
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The BoU officials, who also appeared before the committee alongside their counterparts from telecom companies, said because of the unpopular tax, the mobile money transactions had declined by Shs672b in the first two weeks of implementing the tax. Although BoU staff wanted the Bill shelved, Mr. Mutebile later met Finance ministry officials and agreed on a different position.
But Mr. Bahati said that the decision was reached after wide consultations and strategic engagement in all organs of the government, including agencies and departments.
“This is the final position of the government on this matter, we are still standing by the tax measure and the reduction from one percent to 0.5 percent,” Mr. Bahati said.
In August this year, officials from the central bank had told the committee that the 0.5 percent tax was unpopular and asked MPs to drop the Bill in public interest.
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