Red Pepper Uganda

MPs Approve Tax On Social Media, Mobile Money

Parliament has approved proposals to tax mobile money transactions and social media.
The decision followed a heated debate on the report of the Finance Committee on suggestions presented by the government through the Excise Duty (Amendment) Bill.

The approval implies that each person using platforms like WhatsApp, Facebook, Viber and Skype among others, will be subjected to a daily levy of 200 Shillings while each mobile money transaction will be subjected to a 1 percent excise duty. The government is projecting to collect 284 billion Shillings from the measures.

Also approved is the 200 Shillings levy on every litre of cooking oil, 100 Shillings for every litre of diesel and petrol, 650 Shillings on each litre of Opaque beer, 1500 Shillings per litre on ready to drink spirits and 200 Shillings for every litre of non-alcoholic beverages with the exception of fruit or vegetable juices.

However, MPs in the same Bill reduced excise duty on soft drinks from 13 to 12 percent and exempted sugar confectionaries including chewing gum, sweets and chocolates to enhance Uganda’s competitiveness in the East African region where countries have exempted confectionaries.

During the debate, MPs displayed a sharp division on the tax measures. The Leader of Opposition Winifred Kiiza, Bungokho North MP Gershom Sizomu Wambedde, Bukoto East MP Florence Namayanja, Kassanda County MP Patrick Nsamba Oshabe and several others opposed the 1 percent tax on mobile money transactions saying that it will exclude the majority of Ugandans from financial transactions.

Kiiza argued that more taxes should be put on alcohol rather than piling taxes on the vulnerable Ugandans.

She also expressed dismay over the several tax exemptions on companies that should be paying tax.

Manjiya County MP John Baptist Nambeshe also opposed the proposed 1 percent tax on mobile money transactions saying that majority of those using Mobile Money are low-income earners who need support as opposed to exploitation.

Kumi Woman MP Monica Amoding said that the 1 percent tax on Mobile Money transactions would reduce financial inclusion in the country.

However, Kyankwanzi Woman MP Ann Maria Nankabirwa supported the mobile money levy describing it as a service-gain. She cited the need for Ugandans to have an obligation for paying taxes as they demand services.

Nankabirwa was supported by other MPs including Aruu County MP Odonga Otto, Katikamu North MP Abraham Byandala who described the opposing of the proposed taxes as lack of patriotism. Byandala said that government has no money minting machine and that if Ugandans do not pay taxes, there shall not be services provided.

Padyere County MP Joshua Anywarach described the tax on social media as double taxation since airtime, which is used to subscribe for internet data is also taxed.

State Minister for Planning David Bahati told MPs that the proposed tax measures will help raise revenue for the nation and not a punishment to Ugandans.

The government expects to generate 951 billion Shillings from all the proposed new policy measures and another 272 billion Shillings from administrative efficiency. Collectively, the government expects to collect a total of 16.2 trillion Shillings in the 2018/2019 financial year with a projected growth of 7.6 percent.

-URN
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