MTN Mobile Money users will now be paying 10% more on withdrawals following an increment in charges. In a notice issued today, the withdrawal charges are now at a minimum of 330 Uganda Shillings from 300 Uganda Shillings. Depending on the amount one is withdrawing either from an agent or an ATM; the fees are up by 10percent.
Maria Kiwanuka, the finance minister at the reading of the 2014/15 National Budget proposed a 10percent excise duty levy on mobile money withdrawals. The increment in fees by the telecom company is to cater for the levy proposed by government. MTN Uganda is the first telecom company to increase withdrawal charges as a result of the new tax proposal.
These charges will take effect on 1st August 2014 according to the notice.
This is the second time a telecom company increases charges on mobile money after they remains unclear how they increased charges in 2013 but did not remit the taxes did the same at this time in 2013. In 2013/14, the Ministry of Finance Planning and Economic Development had introduced a 10percent levy on Mobile Money charges. This, according the Kiwanuka created an anomaly and even after charges were increased, the telecoms did not remit taxes to URA.
MTN Uganda is yet to respond to our queries on the proposed levy.
However, Pheona Wall, Airtel Uganda’s Public Relations Manager, admitted that “no tax was remitted to URA” because they did not transfer the levy charges to customers. Airtel Money is second to MTN Mobile Money in terms of transactions and customer numbers.
In a July 2013, press statement, MTN Uganda announced an increment in charges by 10percent in a move they said was to cater for the levy by government. It still due to an anomaly and yet they have gone ahead to hike charges again.
In 2013, MTN Uganda made 147 billion Uganda Shillings from Mobile Money, up from 64 billion Shillings in 2012. Mobile money transactions at the end of 2013 were at an estimated 18.6 trillion Uganda Shillings, according to Bank of Uganda (BOU) statistics.
Pheona Wall from Airtel notes that “this tax will have an impact on the customer that is making a withdrawal.” She said Airtel was still reviewing the measure and that they will likely be passing the tax to the customer.
Mobile money, according to Musa Mayanja Lwanga, a research analyst at the Economic Policy and Research Centre, is still popular with Uganda because it is convenient, fast and affordable for many.