The government says one percent tax charged when depositing money on Mobile Money will be scrapped off and it was an error that was made on the 1st July when the social media tax took effect.
The Ministers of state in charge of Planning David Bahati on Tuesday clarified that the 1% tax that was charged on deposit on mobile money on one’s account was an error.
Bahati also noted that as cabinet they resolved that the new taxes would stay and stressed that in the region Uganda has got the lowest tax base.
No more tax
Cabinet directed telecom companies to stop taxing people depositing cash on their personal mobile money accounts.
On Sunday, telecom companies started effecting the one percent tax deduction on all mobile money transactions.
Bahati says the mobile money levy came up for discussion in cabinet on Monday, adding that cabinet clarified that the tax isn’t applicable on deposits on personal mobile money accounts.
Apart from removing the tax on personal deposits, Bahati says the tax will be enforced as it was passed by Parliament. He explained that government will review the new tax where necessary.
Bahati also said they have asked telecom companies to invent and innovate ways of ensuring that social media users pay the Shs200 levy conveniently.
Reviewing social media tax
Government had earlier agreed to review the progress of social media tax after two weeks of implementation.
“After 2 weeks, the Commission together with @URAuganda, telecoms and Ministry of Finance will meet to evaluate the progress of Social Media Tax,” Uganda Communications Commission (UCC) tweeted.
Godfrey Mutabazi, the UCC executive director, told Daily Monitor that he reached an agreement with URA, telecom operators and the Finance ministry to review the process after two weeks.
“We are also exploring other options to make sure the payment is cheap for the users. However, the bottom line is that the social media tax will stay,” Mutabazi said.
A section of the public has installed virtual private network (VPN) services to bypass the taxes.