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Banks: Mobile Money Tax Risks Scaling Down Financial Inclusion :: Uganda Radionetwork

Banks: Mobile Money Tax Risks Scaling Down Financial Inclusion

Uganda Bankers Association UBA Chief Executive Officer, Wilbrod Owor has said that the mobile money tax could lead to regression in strides that Uganda has made in promoting financial inclusion.
Key players in Uganda's Banking sector addressing journalists today

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Uganda Bankers Association (UBA) Chief Executive Officer, Wilbrod Owor has warned that the newly introduced mobile money tax could erode strides that Uganda has made in promoting financial inclusion.

The government slapped a one percent tax on mobile money transaction. The tax that has caused outrage was effected on July 1st at the start of 2018/19 financial year. Owor argues that both banks and telecom companies are together in supporting and promoting financial inclusion.

He says the banks have had many opportunities to converse with policy makers on new taxes that were brought on board in the 2018/19 financial year. Owor says technology aided transactions have brought more people in the banking and transactions fold.

David Bahati, the State Minister for Finance yesterday said the mobile money transactions have reached Uganda shilling 62 trillion which is nearly 50 percent of Uganda's growth Domestic Product (GDP).

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After introduction of mobile money taxes, many Ugandans expressed displeasure, vowing to return to banks. And many mobile money agents are already crying out, reporting reduction in customer numbers. Asked whether banks will benefit from the taxes by getting more customers, Owor said banks and telecom companies are partners in the financial sector.

Owor said they have had street talks that banks could have pushed for the mobile money tax which he dismissed. He argued that both banks and telecommunication companies are behind collection of taxes which will develop the country.

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Stanbic Bank Uganda, CEO Patrick Mweheire said Ugandans should sympathise with government which is trying to increase tax collection in a largely informal economy. Anyone placed in the position of finance minister, Mweheire argued can easily slap more taxes on mobile money because there are more than 20 million Ugandans with mobile phones compared to about 6 million Ugandans with bank accounts.

Mweheire said large tax payers have been overtaxed and government is now looking for way to bring more people under the tax pyramid.

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Mweheire and Owor made the remarks while responding to questions from journalists during a presser announcing this year's bankers' conference. Themed “fiscal sector stability: managing risks in a growing and fast changing environment,” the conference will take place on July 17th at Serena Hotel.

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