Following a lengthy meeting on Monday, July 16 at Statehouse, Entebbe, cabinet resolved to suspend the tax on sending money on the mobile money service. This follows an earlier removal of the tax on depositing money via the same service.
After countrywide protests and outrage on taxes, the cabinet has said that a 0.5% tax will be charged only on withdraw transactions.
Frank Tumwebaze, the Information and National Guidance minister, however, has revealed that the social media taxes will stay for government to be able to finance budget deficits.
Mobile money taxes were widely contested especially by the private sector saying they are increasing the cost of doing business.
Junior Finance Minister David Bahati while addressing journalists at Media Centre in Kampala said that the proposed amendments will be presented to Parliament on Thursday, July 19.
He also assured that the refund of people who had been charged 1% tax on transactions will be affected as had been directed by President Yoweri Museveni this past week.
Bahati said that government will be able to raise Shs118 billion from taxing only mobile money withdrawals.
On social media, Minister Bahati said that government is working on modalities of paying it conveniently with telecoms using other means than mobile money.
“We want to get more options so that you can pay quarterly or annually, in addition to the daily, weekly and monthly subscriptions,” he said. adding: “We want to facilitate that access so that payment becomes more convenient.”
Social media activists had earlier proposed that telecoms must embed social media tax in data transactions instead of charging it directly as it is currently done.
Last month, Parliament approved the Government’s proposal to levy a 1% tax on all mobile money transactions and the daily sh200 over the top (OTT) services on social media, causing public uproar.