Civil Society Organizations (CSOs) have asked parliament to prevail over government’s proposal to introduce new tax on all mobile money transactions.
The Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI) and Civil Society Budget Advocacy Group (CSBAG) said that the 1% proposed new tax is repressive and parliament should not pass it.
These CSOs were on Tuesday appearing before the committee on Trade, Tourism and Industry to present a position paper on trade, tourism and industry sector ministerial policy statement for the financial year 2018/19.
“I do pay PAYE (Paye As You Earn), I also pay KCCA tax, and other numerous taxes. Now I am also being taxed for sending or receiving money. I think this new tax is very unfair and repressive,” Africa Kiiza, SEATINI, program officer said.
According to the tax proposals contained in the Excise Duty (Amendment) Act 2018, as proposed by government, a tax of 1 per cent of the value of the transaction will apply on mobile money transactions on receiving money, making payments and withdrawals of money.
Fort Portal Municipality MP Alex Ruhunda said that this tax may affect the mobile money industry and the economy yet it has been an effective tool to reaching rural communities.
“This 1% tax on mobile money is going to affect the entire economy because mobile money transactions have been very effective tool to reach the rural communities. Many of MPs cannot survive minus mobile money services because we have no time to go to banks and we rely on phones to send money to the constituency,” Ruhunda said.
“Now we are looking at charging mabugo (condolence fee) which we send to our local people nearly on a daily basis because you can’t tell when death will come. So when deposit you are charged 1% and when you withdraw you are also charged 1% then that is going to kill the whole industry. I really don’t know what the tax collectors were thinking about to come up with such a proposal.”