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Government collects Shs7b from criticised social media tax, vows to maintain OTT.

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Uganda’s Finance Minister, Matia Kasaija introduced the Excise Duty (Amendment) (No.2) Bill 2018, which only seeks to lower taxes on withdrawal of Mobile Money to 0.5 per cent.

The Bill, which now stands referred to the Committee on Finance, Planning and Economic Development, makes no mention of the Shs200 daily tax for access to Over The Top (OTT) platforms like WhatsApp.

The object of the Bill, said Kasaija, is “to amend the Excise Duty Act, 2014 to limit the taxable mobile money transactions to withdrawal and to reduce the duty payable”.

Government has revised the tax on Mobile Money following intense public criticism it has suffered since the advent of the Excise Duty Amendment Act 2018, which among others introduced the taxes.

President Yoweri Museveni would later, in a letter posted on his Facebook page, say the taxes were meant to only affect withdrawals and was supposed to be 0.5 per cent.
Museveni, however, said the Shs200 social media tax would stay.

At a news conference this week, Finance State Minister (Planning), David Bahati said government has already minted Shs7b in the much criticised social media tax, and that the idea of removing it would not be entertained.

Section 2 of the Bill now seeks to substitute paragraph (f) of the Act with the following; “(f) Mobile Money transaction of withdrawal of cash, 0.5 per cent of the value of the transaction.”

Currently, telecommunication companies are charging one per cent on withdrawals and deposits, which Museveni said will be refunded after the amendment.

Deputy Speaker Jacob Oulanyah asked the Committee to entertain a raft of petitions that has flooded the Speaker’s office in the recent past.

“This matter has been in the public domain and the Office of the Speaker has been awash with petitions and letters on this issue; consider all of them and have more discussions and let the matter be properly debated,” said Oulanyah.

Deputy Chief Opposition Whip Roland Mugume sought clarification from Kasaija on what would happen pending the amendments, but Oulanyah said aggrieved persons have the option of filing for tax refunds.

MP Latif Ssebaggala (IND, Kawempe North) said the Committee should expedite its work as the matter affects the public.

“Our rules give Committees 45 days to report. Would it be procedurally right if you gave them specific days within which to handle this issue?” said Ssebaggala.

Oulanyah said the rules states 45 days, and urged Committee Chairperson Henry Musasizi to expedite the process.

Kasaija apology

The House received Kasaija’s apology over statements attributed to him on local media, which faulted the House for the 1 per cent tax.

“I apologise sincerely. I did apologise to the caucus yesterday. I never meant to say that Parliament passed the Act in error,” said Kasaija.

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