Uganda: MPs Vote On Mobile Money Tax Afresh

By Moses Kyeyune

Kampala — The controversial mobile money tax returns to Parliament today for a fresh vote after a similar undertaking flopped last week.

The tax proposal presented in the Excise Duty Amendment Bill (2018) No. 2 seeks to reduce the current one per cent levy on all mobile money transactions to at least 0.5 per cent in line with President Museveni's directive in July.

If passed into law, government intends to collect Shs115 billion to fund part of its budget, similar to the same amount targeted with one per cent.

However, the Bill has since attracted protests from a section of MPs who have cited discrimination, lack of equity and clarity of a collection mechanism.

When it was presented last week on Thursday, the mood in the House was tense.

The majority report backed the government's 0.5 per cent yet the MPs, who signed the minority report, wanted the tax scraped in public interest.

Realising that Mr Paulson Luttamaguzi (Nakaseke South, DP), who presented the minority report, was getting support across the political spectrum, the few Cabinet members in the House decided to filibuster the proceedings.

The situation was saved by Ms Betty Amongi (Oyam, UPC), who cited technicalities premised on the lack of the requisite quorum for the vote to be taken.

The proponents kept demoblising their colleagues, forcing Deputy Speaker Jacob Oulanyah to adjourn the session.

"Whether we defer this matter by a year or two, the results are likely to be the same; whether we postpone by one day or one week, the same results shall suffice," Mr Oulanyah said.

To vote on the Bill, the House required 154 MPs present yet the head count revealed that only 97 out of more than 450 MPs were in attendance.


Lawmakers opposed to the Bill contend that there is no law to regulate the use of mobile money.

Mobile money services are already faced with huge transaction fees which has registered a decline in the number of users.

MPs from the ruling NRM party say the tax will generate more revenue to support the budget whose priorities are already committed.

Mr David Bahati, the Minister of State for Planning, said the tax is aimed at lowering Uganda's foreign debt burden.

To cover the debt, government wants to capture majority of the unbanked population in the informal sector.

"We have a number of people in the informal sector who are largely using mobile money and this tax will enable us raise the required revenue," Mr Bahati said.

Mr Henry Musasizi (Rubanda East, NRM) said mobile money is an efficiency gain and should be taxed.

"Money has migrated from the traditional payment systems like banks to the digital platforms. It is, therefore, important that taxes be levied on such platforms. Using mobile money is a choice as there are other methods of payment which are already attracting taxes.

By press time yesterday, NRM MPs had been summoned for a Caucus meeting at State House Entebbe for a common ground before today's debate.

MPs' views

Paulson Luttamaguzi (Nakaseke South, DP): "This is the time to see who is for the people and those that are anti-people. There is no more excuse hiding in chorus, the presiding Speaker (Oulanyah) has already set a clear stage for us to display our hearts to the people."

Rose Mutonyi (Bubuulo West, NRM): "Our population needs better services, we need good roads, improved medication and quality education; all these need taxes. It should not be Parliament to mislead people into not paying taxes, we should pay the tax, besides, it is a reduction from one per cent to 0.5 per cent, where is the problem?

John Baptist Nambeshe (Manjiya County, NRM): "I want to warn all my caucusing friends, come 2021, you have already condemned yourselves to political oblivion; this is a tax that is very repressive, prohibitive and painful to the people who voted us. If you do not have compassion, you do not have your people at heart."

Patrick Isiagi (Kachumbala County, NRM): "Mobile money operation is a revolution, a growth factor that we should not miss, a product that is still at infantry stage. How can we afford to continue suffocating the sector even when it is clearly falling? We are representatives of the people, we cannot legislate and pass this tax, we cannot continue even after understanding that what we have done is wrong."