GSMA, Uganda to meet over mobile-money tax plan

An MTN Mobile Money agent in Kampala. GSMA will meet with the Ugandan government in October to discuss the recently imposed mobile money taxes. PHOTO | MORGAN MBABAZI | NMG 

In Summary

• Last month, parliament passed a law that imposed a 1 per cent tax on mobile-money transactions as well as a daily $0.05 over-the-top tax on social media services.
• East Africa is one of the largest mobile money markets, accounting for 56.4 per cent of total users in the sub-Saharan Africa.

By MOSES K. GAHIGI
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GSMA, the body that oversees the telecoms industry globally, has announced that it will meet with the Ugandan government in October to discuss the recently imposed mobile money taxes.

Last month, parliament passed a law that imposed a 1 per cent tax on mobile-money transactions, including depositing, sending, receiving and withdrawal, as well as a daily Ush200 ($0.05) over-the-top tax on social media services.

The tax elicited mass protests, with activists marching in the streets and others taking to social media to vent their shock and frustrations.

Many said the tax will only succeed in taking back the economy to cash transactions and affect jobs.

“We want to engage the government so that we can clearly understand their perspective, and then we shall pick it from theres,” Said Kenechi Okeleke, lead analyst at GSMA Intelligence.

After pressure from consumers, Kampala dropped three of the four levies it had imposed on mobile money transactions, and now maintains only a 0.5 per cent charge on cash withdrawals.

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Uganda has over 22 million mobile money accounts, meaning that more than 150,000 mobile money agents’ jobs are on the line following the proposed tax on mobile-money transactions.

The Civil Society Budget Advocacy Group says the tax does not meet one of the principles of taxation — fairness — and will frustrate Ugandans.

Mr Okeleke said that GSMA’s engagement with the stakeholders of the mobile industry in Uganda is expected to generate understanding of the sector, which will help point out the sticking points as well as identify what other opportunities are open to the various players.

“The forum is expected to create an enabling environment that supports the mobile money industry to enable more adoption,” he said.

East Africa is one of the largest mobile money markets, accounting for 56.4 per cent of total users in the sub-Saharan Africa.

Mobile money is expanding rapidly across the region and, in 2017, the total value and number of transactions grew by 14.4 per cent and 17.9 per cent to reach $19.9 billion and 1.2 billion respectively.

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