A section of Members of Parliament have threatened to block the proposed 1 per cent tax on the value of transaction on mobile money, saying it will discourage low income earners from using the service.
Speaking during the Civil Society Budget Advocacy Group (CSBAG)’s breakfast meeting in Kampala yesterday, the legislators said mobile money is the cheapest way of doing transactions in hard-to-reach areas.
Soroti Woman MP (FDC) Angelline Asio Osegge said it was unthinkable that the government could propose taxes on mobile money which has provided employment to thousands of educated and uneducated youth and women.
“The 1 per cent tax on every transaction sounds small but if you are to equate it to the amount people transact on mobile money, it is very big. This tax is enough to make people shun using mobile money. That would mean thousands serving as mobile money agents are likely to lose jobs,” Ms Osegge said.
“We cannot let corrupt minds sitting in offices catered for using taxpayers’ money make life for ordinary citizens difficult,” she added.
The civil society group data picked from MTN shows that more than 61 per cent of mobile money transactions are less than Shs45,000. The figures also reveal that at least 150,000 people are employed by different telecom companies as agents.
Mubende Municipality MP (NRM)Anthony Ssemuli, said charging every transaction on mobile money for instance sending, receiving and withdrawing would amount to double taxation.
The executive director of CSBAG, Mr Julius Mukunda, said the tax on mobile money was likely to retard the industry that was fast growing compared to slow growth rate of banking institutions.
“Taxes on mobile money will also increase black market operations like money laundering. People are likely to resort to insecure cash dealings,” Mr Mukunda said.
Mr Gafabusa Mbwatekamwa, the Kasambya County MP (NRM), rallied the public to protest the tax by marching to Parliament, saying government listens to actions not words.
“Ugandans, you are very good at talking on social media but when it comes to demonstrating they keep quiet. It is time you come out and hold a massive demonstration against mobile money taxes,” Mr Mbwatekamwa said.
Mitooma District Woman MP Jovia Kamateka (NRM) warned the government not to victimise the poor in its bid to widen revenue.
“I am an MP and I often get calls from people seeking for my help when they have lost relatives, sick relatives or in need of school fees. I respond to such requests using mobile money. Imagine if I am to be taxed on a very transaction how much would I lose?” she said.
The legislators said mobile money taxes will not be passed in Parliament. MPs urged the government to find other means of increasing its revenue rather than taxing people on their available sources of income.