Parliament approves new Mobile Money tax

Parliament approves new Mobile Money tax

Parliament on Tuesday evening voted to pass the contentious Excise Duty Amendment Bill (2018) No 2, approving a 0.5% tax on mobile money transactions with immediate effect. Junior finance minister David Bahati (Picture credit: Parliament of Uganda/Twitter)

By George Aine

Parliament on Tuesday evening voted to pass the contentious Excise Duty Amendment Bill (2018) No 2, approving a 0.5% tax on mobile money transactions with immediate effect.

A total of 164 MPs voted to support the controversial tax on mobile money while 124 voted against Clause 2 of the Excise Duty Amendment Bill(2018) No 2 that proposes the controversial tax.

A total of 288 MPs voted out of the 463 MPs that constitute Parliament, meaning that some 175 lawmakers were absent when Parliament was making a critical legislation that affects the many Ugandans who use mobile money transactions.

Voting on the polarising bill was not without a glitch as an initial vote, conducted by show-of-arms, and was rejected by the Deputy Speaker Jacob Oulanyah who ruled that the vote was marred by misconduct, much to the chagrin of pro-tax MPs.

Government Chief Whip Ruth Nankabirwa, Security Minister Gen Elly Tumwine and Rubanda East MP Henry Musaasizi (Finance Committee Chairman) strongly protested the fresh voting but Mr. Oulanyah rebuffed their protests and insisted on a fresh vote.

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Mr. Oulanyah directed that a fresh vote be conducted by roll-call and tally. MPs supporting the 0.5% tax on mobile money transactions won the roll-call and tally vote with 164 to 124 votes.

In the voting by show of arms, 136 MPs had voted to support the 0.5% tax while 101 had opposed it.

There were no abstentions for both votes.

288 MPs voted out of the 463 MPs.

Ndorwa MP moves a motion

Ndorwa East MP Wilfred Nuwagaba moved a motion demanding that Clause 2 of The Excise Duty Amendment Bill be deleted and the tax on mobile money transaction to be entirely scrapped.

A minority report authored by Nakaseke South MP Paulson Luttamaguzi argued that the tax be entirely scrapped in public interest.

Mr (Nakaseke South, DP), who presented the minority report.

The government had initially proposed to slap a 1% charge on mobile money transactions but backtracked and reduced the tax to 0.5% after coming up against stiff criticism of the move by different players who warned that the tax proposals smirked of discrimination, lack of equity and clarity of a collection mechanism.

With both sides diametrically opposed, tempers flared as MPs opposed to the 0.5% tax accused the government side of trying to rig the vote, triggering an angry exchange of words that brought back memories of the brawls manifested in Parliament during the removal of age limits last year.

Museveni defends mobile money tax

Opposition and some NRM MPs were strongly opposed to the 0.5% tax, prompting Mr. Museveni to summon NRM MPs to State House Entebbe for a caucus meeting where he made a final pitch in favour of the amendment.

Mr. Museveni’s arguments has been that the government intends to collect Shs115 billion to fund part of its budget, similar to the same amount targeted with one per cent.

In defence of the mobile money tax, Mr. Museveni has argued that the government borrows to bankroll the budget “because many people who are supposed to pay tax do not pay the tax.”

For the Shs 32t 2018/19 budget, Shs 17.5t will be financed by taxes collected from within Uganda while Shs 8.3t will be from borrowing within Uganda and Shs 280b from grants outside Uganda.

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