Warning: Trying to access array offset on value of type bool in /usr/www/users/urnnet/a/story.php on line 43
Mobile Money Tax Lacks Basis - ICT Body :: Uganda Radionetwork
Breaking

Mobile Money Tax Lacks Basis - ICT Body

The information and communication technology association of Uganda ICTAU has issued a statement asking government to reconsider the recently introduced taxes on Mobile Money and Over-The-Top OTT services. ICTAU chairman Albert Mucunguzi says in a statement issued today and published on the organisations website, that the new taxes were enacted without sufficient deliberation or consultation and are not supported by evidence-based research.
The Information and Communication Technology Association of Uganda (ICTAU) has issued a statement asking government to reconsider the recently introduced taxes on Mobile Money and Over-The-Top (OTT) services.

ICTAU is an umbrella association that brings together organisations and key ICT Stakeholders in areas of research and advocacy for policies concerning adoption and usage of new technologies by Ugandans.

ICTAU chairman Albert Mucunguzi says in a statement issued today and published on the organisation's website, that the new taxes were enacted without sufficient deliberation or consultation and are not supported by evidence-based research.

Mucunguzi warns that the taxes could constrain the development of Uganda's “industry, economy, and society.”

Mucunguzi says ICTAU has resolved to support domestic and international efforts to repeal these taxes, including the legal petition launched by the Cyber Law Initiative. The ICT association is calling for a dialogue involving the Ministry of ICT and National Guidance together with its agencies—Uganda Communications Commission (UCC) and National Information Technology Authority (NITA-U) on the matter.

Government introduced a one-percent tax on mobile money transactions and 200 shillings daily on social media users effective July 1, 2018, when the 2018/2019 financial year budget came into force.

There's been a public outcry from activists, business community and policy makers saying the taxes are ill-timed, unfair and disproportionate.

This appears to be the same argument ICTAU is advancing in their statement. They argue that the flat tax on social media and other common internet services will disproportionately affect the large number of Ugandans who live in poverty, “further widening the digital divide, while limiting the public's ability to access information, communicate and express themselves.”

ICTAU further notes that the new taxes on Mobile Money transactions will make these financial services less accessible to vulnerable populations.

Mucunguzi says both taxes show a lack of a predictable policy development process and threaten to make Uganda a less attractive destination for investment. He adds that both taxes may negatively impact the education sector by increasing the cost of common activities carried out by students and teachers.

Several schools have embraced the Mobile Money-based tuition payment methods through banks such as Centenary Bank. Under these methods, money is deposited from a mobile phone onto a school bank account.

Mucunguzi further notes that additional charges added to Mobile Money in particular threaten the survival of innovative companies in the digital payments space, commonly referred to as fintech, and make it more difficult for innovators to create new solutions within that ecosystem.

The increased cost of using Mobile Money services, he says, could encourage people to revert to cash and the informal economy. This in turn could decrease the ability of Government, businesses and individuals to monitor and account for economic activity.

He says many members of the public are still ignorant about the new taxes due to the lack of consultation and sensitisation.

Support us


Keywords