Over 100 MPs have collected signatures to petition the Speaker of Parliament, Rebecca Kadaga against tax proposals on mobile money transactions.
The group led by deputy opposition whip Roland Kaginda Tugume, Kasambya county MP Gaffa Mbwa Tekamwa and Manjiya county MP John Baptist Nambeshe told the press today that they hope to collect 320 signatures by end of this week.
The legislators said that the proposal to levy 1% tax on the value of transactions-payments and withdrawals on mobile money in the financial year 2018/19 national budget estimates will reverse the move towards financial inclusion.
The group which belongs to the Parliamentary Forum on Public Finance Management and the Greater North Parliamentary Forum said that the tax on mobile money transactions will hurt the poor and vulnerable, and frustrate financial inclusion because less than 48% of the 112 districts in Uganda have access to any bank branch and ATM, and more than 10 million Ugandans access financial services through mobile money.
“We are against this idea because as you know most of our rural areas don’t have banking institutions like the hard to reach areas and majority rely on mobile money services,” Tugume said.
Mbwatekamwa said that the tax proposal could promote money laundering and other black market operations and thereby proposes that the ministry of finance increases the excise duty from the proposed 10% to 17.5% on mobile money withdraw fees to generate 122 billion shillings.
He said that though this will fetch 33 billion shillings less than what could be generated from the 1% tax on transactions; it will avert numerous economic disasters.
He added that the government should consider raising taxes on mobile money income balances especially the escrow accounts which could result in collection of Shs 800 billion, encourage savings and income distribution.