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URA Collects Shs103b from Mobile Money Tax in Three Months

The Uganda Revenue Authority (URA) has collected Shs103b from mobile money tax out of the targeted Shs 151.5b in the first quarter of the 2018/19 financial year, underlying the continued impact of the controversial tax on the service.

Mobile money tax was introduced on July 1 following the implementation of the Excise Duty Amendment Act amid protests from different interest groups, including government.

And now information from URA for taxes collected between July and September indicate that the tax man collected Shs103b from the 1 percent Mobile Money tax imposed on users of the service before the latest revision to 0.5%.

When contacted, Mr Ian Rumanyika, the URA public affairs manager, said the reviews and debates on the tax could have affected their collections.

He said, for example, when the 1% tax was in full effect, where both withdrawals and deposits were taxed, they registered more collections but in the last days of August and September when the President said only withdrawals should be taxed, there was a reduction.

For the month of July, Henry Saka, the head of Domestic taxes at URA, said that the one per cent mobile money tax contributed Shs22 billion ($5.8 million), while the Shs200 ($0.05) daily excise duty on social media use contributed Ush4.3 billion ($1.1 million).

Mr Rumanyika said with the new tax review from 1% to 0.5%, there is likely to be a major reduction of the URA collections in the second quarter of October to December. URA has a revenue collection target of Shs16 trillion for the 2018/19 financial year.

By August, a month after the tax had been introduced, mobile money transactions had declined by Shs672b in the first two weeks of enforcing the tax, Bank of Uganda and telecoms reported.

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Within the same period, telecom giant MTN Uganda, has reported a 30 per cent decline in revenue since the taxes became effective.

Parliament on October 2 passed the contentious Excise Duty Amendment Bill 2018 No 2, approving a 0.5 per cent tax on mobile money transactions. However, the President is yet to consent to the Bill.

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