Prime Minister Ruhakana Rugunda on Wednesday announced plans by government to propose an amendment to the Excise Duty (Amendment) Act 2018, which imposed taxes on Mobile Money transactions and social media.
The one per cent tax on Mobile Money transactions covers deposits, sending and withdrawals.
Over The Top (OTT) platforms like WhatsApp, Facebook, and Instagram among others effective July 1st 2018, remain accessible after payment of Shs200 daily.
“Government is now reviewing the taxes, taking into account the concern of the public and its implication on the budget,” said Rugunda.
He promised to introduce the amendment today on Thursday, which will now take the normal route of an amendment Bill.
Unmoved, MPs from the Opposition said Thursday and the attendant processes are far too long.
“This is an admission that the tax is a bad one; Ugandans are being subjected to extortion,” said MP Moses Kasibante (IND, Rubaga North), wondering what will happen as Parliament processes the amendment.
“What will happen between now and the review of the law will be the implementation of the existing law,” said Rugunda, in response.
MP Cecilia Ogwal (FDC, Dokolo) wants the deductions reimbursed to Mobile Money subscribers.
“May we know where the money is being kept and how much has been collected so far…you must return the money that has been collected from the people,” said Ogwal.
Government has been under intense criticism by a section of the public following the implementation of the law.
There has also been denials and blame games by Finance Minister Matia Kasaija, who local media quoted feigning ignorance about the tax law.
Speaker Kadaga has since directed that he apologizes to Parliament, short of which the House will be reluctant to consider business from his Ministry.
Kadaga deferred debate on Rugunda’s statement pending her ruling on what happens to Mobile Money subscribers while an amendment is being processed.
In an article shared on his twitter handle @KagutaMuseveni, President Yoweri Museveni said the proposal was to have the tax levied at the rate of 0.5 and not one per cent.
Museveni said the tax is intended to draw the informal sector into the tax base and to widen the tax to Gross Domestic Product (GDP) ratio, which is the region’s lowest at 14 per cent.
Rugunda hinted at having the amendment “take into account the public concern and balancing the need to finance our budget,” meaning government will be torn between raising revenue and responding to public concerns on the much criticized taxes.
Article 93(a) of the Constitution restricts Private Members from introducing Bills on taxation other than by reduction, making it a preserve of the government through the Finance Ministry.
Earlier in her communication, the Speaker called for consultations with all stakeholders when considering bills.
This she said follows several petitions that she received from the public concerning the two taxes that were imposed.
The Speaker directed the Clerk to follow up on an application that will help the public peruse Bills before they are debated on the Floor.
“I had instructed the Clerk to create an application where the public, upon publication of the Bill, can contact Members online and have their ideas and suggestions therein,” she added.
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