Uganda:Airtel refunds 1% mobile money tax

Telecommunications company, Airtel Uganda has started refunding customers who paid the 1% mobile money tax. 

This month, telecoms; Airtel, MTN and Africell Uganda started charging 1% on mobile money transactions including on withdrawals, sending, deposits and payments after the new tax regime passed by parliament and assented to by President Yoweri Museveni came into effect on July 1.

However, the tax including the social media daily tax of Shs 200 triggered massive outcry in the country. On July 13, Museveni in a statement said that Ugandans who paid the 1% per cent mobile money tax be refunded as the the 1% levy was passed by parliament and signed by him in error.

He ordered the tax be reduced to 0.5 per cent and be charged on only withdrawals. Government also brought an amendment bill currently before parliament to effect the changes.

Following the president's directive, Airtel customers have started receiving the refund. Airtel public relations officer, Sumin Namaganda says that the refund process started yesterday Saturday, July 28.

Namaganda however declined to reveal any further details, saying that Airtel will issue a formal communication soon.  It is not yet immediately clear whether other telecoms; MTN and Africell have also adhered to the directive.

Officials from both telecoms could not be reached for a comment. Ben Abaho an MTN and Airtel customer says that he is yet to receive the refund.

He however welcomed the move to refund the money but urged government to always consult with the people before coming up such policies that he called anti-people and anti-developmental. 

Anthony Nuwagaba an Airtel customer confirmed receiving the refund but wondered how government let the 1% levy be charged in the first place if it was meant to be 0.5%.

He says he's worried this could be a ploy to hoodwink the enraged public and ease the public pressure before reverting to the 1% charge. 

Two weeks ago, the tax body, Uganda Revenue Authority (URA) and the three telecoms were sued at the High court for orders that they immediately refund the one per cent tax that they illegally collected from mobile money depositors.

The suit was filed by two concerned citizens; John Robert Tukyakira and Anthony Odur who accuse telecom companies and URA of illegally and erroneously collecting this tax.

It is not clear how much tax has been collected by the telecoms much as the Finance State Minister David Bahati claimed that government had raised Shs 5bn from mobile money tax and Shs 2bn from the social media tax in less than two weeks after the new taxes were introduced. 

Uganda Revenue Authority spokesman Vincent Seruma told The Observer recently, “We have no idea how much money has been collected since they started levying the two taxes as the telecom companies are yet to report back on how much money has been collected."

Officials from the two major telecoms, MTN and Airtel have reportedly huge losses following a quiet public stay-away protest against both the mobile money tax and social media tax.

Several mobile money agents have also reported significant drop in business while others have been forced to close shop altogether.

SOURCE:OBSERVER