Telecommunications operators have asked Parliament to revise the 0.5 percent tax on mobile money cash withdrawals, warning that the levy disproportionately affects low-income Ugandans who depend on the service daily.
Appearing before legislators, a team led by MTN’s General Manager for Corporate Services, Dennis Kakonge, said the current tax on mobile money cash withdrawals creates an unfair burden when compared to other withdrawal channels such as ATMs and banking services, which are more accessible to middle-income earners.
“When you send money for Parish Development Model, Emyooga, women down there will suffer the tax burden, they are your taxpayers,” said Kakonge, adding that “the levy is not even comparable to other markets.”
MTN Uganda and airtel Uganda officials appeared before the Committee on Finance, Planning and Economic Development chaired by Hon. Amos Kankunda, on Wednesday, 15 April 2026.
Kakonge explained that currently when an MTN mobile money user withdraws cash, one pays 0.5 percent excise duty on the withdrawn value but not the service fee. Such that a Shs500,000 withdrawal incurs Shs2,500 in excise duty on the transaction value, plus 15 percent on the service fee.
“This creates tax burden, Uganda taxes mobile money transactions more heavily than markets with larger digital economies and higher income, there is a need to address this challenge,” Kakonge said.
The telecoms proposed a reduction of the tax from 0.5 percent to 0.25 percent, with a cap of Shs5,000 per transaction, arguing that a lower rate would stimulate usage and ultimately boost government revenue. Kakonge said projections by the operators indicate that a 0.25 percent tax could generate up to Shs80 billion in mobile money revenue collections.
“The more we encourage transactions, the more the mobile money users and the more revenue in a long-term,” Kakonge said.
He also urged Parliament to remove import duties on entry-level smartphones, noting that high taxes have made the devices unaffordable for many Ugandans and encouraged smuggling. Kakonge said the Uganda Revenue Authority has repeatedly raised concerns about phones entering the market without paying taxes.
He added that the high cost of smartphones has limited digital participation, leaving many Ugandans unable to access online services.
The MPs, however, tasked MTN Uganda to improve network connectivity across the country, citing persistent gaps in service delivery, particularly in tourism areas.
“If you met the tourism operators and hoteliers, they would spend all day complaining that you enter a place like Bwindi and there is no network. When we were in campaigns, you would reach a village where you could not communicate yet you are licenced to cover the whole country,” said Hon. Dicksons Kateshumbwa, the Sheema Municipality representative.
Otuke County MP, Paul Omara, expressed concern over high mobile money charges, saying they discourage usage and undermine financial inclusion. He urged operators to review transaction fees to make services more affordable.
Mbale Industrial Division MP, Hon. Karim Masaba, asked MTN to maintain current charges on agent banking services, noting that they remain affordable and widely preferred over long banking queues.
