KAMPALA – MTN Uganda has issued a detailed breakdown of mobile money withdrawal charges following growing public debate over transaction fees and government levies on mobile financial services.
The clarification comes after widespread discussion on social media about the cost of withdrawing money via mobile money platforms, particularly a sample transaction of UGX 150,000 that attracts a total fee of UGX 4,325.
In its explanation, MTN Uganda stated that UGX 750 of the charge is attributed to a 0.5% government levy, while UGX 466 goes toward 15% excise duty on the service fee—bringing total government-related deductions to about 28% of the fee structure.
According to the company, mobile money agents receive UGX 1,600 from the transaction, representing approximately 37%. MTN Uganda retains UGX 1,509 (about 35%), which it says is used to cover operational costs including network infrastructure, platform maintenance, regulatory compliance, and administration.
The company emphasized that a significant portion of the mobile money ecosystem is supported by over 200,000 agents nationwide, who provide liquidity and facilitate cash-in and cash-out services using their own capital.
MTN Uganda further argued that the broader issue is the taxation applied to customers when accessing their own funds, noting that mobile money users are often taxed at multiple stages—from income generation to withdrawal.
“If you earn UGX 500,000 via mobile money, you’ve already earned taxed income, then pay a 0.5% withdrawal levy, and service fees are taxed again,” the company said in its statement, adding that the structure raises concerns about double taxation.
The clarification follows public reactions sparked by online users questioning the distribution of mobile money charges, with some calling for greater transparency and lower transaction costs.
Economists and financial inclusion advocates have long argued that high mobile money taxes could discourage digital financial usage, especially among low-income earners who rely heavily on mobile platforms for daily transactions.
In response, MTN Uganda said discussions should focus on reviewing the 0.5% mobile money withdrawal tax, rather than the service fee component, which it says is shared across multiple service providers in the ecosystem.
The debate continues as mobile money remains a key driver of Uganda’s financial inclusion, facilitating billions of shillings in transactions daily across urban and rural communities.
