KAMAPALA – President Museveni has directed that mobile money users who were charged 1 percent for mobile money transactions starting July 1 should have their money refunded as the deductions were made in error.
“I signed the law with the error because we could not delay the other measures. However, Parliament, when it reconvenes, will be requested to correct it. The ones whose deductions had been made on the basis of 1% should have their money reimbursed,” Museveni wrote.
Museveni was responding to queries raised on his official Facebook page by various people who raised concerns over how the tax was implemented and how the revenues from it will be used.
Without explaining how this will be done, the president maintained nonetheless that the tax was necessary if the country is to increase its revenue base.
“Mobile money transfers have brought to the surface the big volumes of money that are moving around the country. Each day US$ 52m moves around in the form of mobile money. This is about US$ 19bn a year. Much of this money is by big people; but, of course, some of it is by, economics-wise, small people. Therefore, in an effort to have self-sufficiency in budget, this is a convenient source we should not over- look.”
Activists argued the one percent tax would among others hurt the poor and reverse the gains so far made on financial inclusion.
They advised government to consider an increase in excise duty from 10 percent to 17.5 percent on withdraw fees, impose 0.3 percent on withdrawal amount for mobile money and 0.3 percent on withdrawal amount for agency banking.