Central Bank Backtracks on its Position Against 0.5% Mobile Money Tax

The Central Bank has harmonized its position with the Ministry of Finance over the proposed 0.5% tax on withdrawals on mobile money transactions, backtracking on its earlier stance on the issue.

In July, government tabled the Excise Duty Amendment Bill in which it was seeking to reduce excise duty from 1% on all transactions to 0.5% on Mobile Money withdrawals which Bank of Uganda opposed saying this was still too high and would affect financial inclusion.

The Governor Bank of Uganda, Emmanuel Mutebile together with the Minister of State for Planning, David Bahati have today informed MPs on the Finance Committee that they held a meeting and agreed on the proposed 0.5% levy.

“We had a meeting with the Governor and this is the final position of government and all its institutions including Bank of Uganda on this matter. As government, we are still standing by the tax measure,” Bahati told the committee.

Bahati added that: “We still believe that the reduction from 1% to 0.5% will be a good step in the right direction”.

Mutebile also informed the committee that the provisions in the Financial Institutions Act 2004 which place limitations on licensing of mobile money services only applies to deposit taking institutions.

He however noted that government will soon be finalizing with the National Payment Systems Bill that will be tabled in Parliament in October.