Uganda: Mobile Money Tax Generates Twice As Much Revenue As Expected by the State

Tax on Mobile Money, introduced by the Government of Uganda on 1 st  July 2018, generated twice as much revenue as expected by the state.

According to the National Tax Authority (URA), the tax levied at 0.5%, collectible on the withdrawal of money only, produced 104.75 billion Ugandan shillings (US $ 28,349,508), from July to December 2018. That is 50 billion shillings more than the 54.75 billion shillings (US $ 14,817,523) provided by the state.

The tax on the Mobile Money has recorded very good financial performance unlike those on applications Over-The-Top (OTT) such as Facebook, WhatsApp, Viber or Skype. The OTT tax generated only 21.12 billion shillings (US $ 5,715,910). The government had set its ambitions at 135.21 billion shillings ($ 36,593,194). Only 15.62% of the forecast amount.

Vincent Seruma, URA’s Deputy Commissioner for Public Affairs and Business, explained the underperformance of the OTT tax by “using alternative means to access social media” . The use of virtual private networks (VPNs) is causing the deficit of 114.09 billion shillings (30,877,283 US dollars) recorded.

Abdul Waiswa, legal adviser of the Uganda Communication Commission (UCC), said the telecoms regulator can not say “how many Ugandans use VPNs because we do not know where and who uses them. We are blocking them permanently, but many are constantly appearing »

Source: Agence Ecofin