President Museveni has assented to the Excise Duty (Amendment) (No.2) Act, 2018 that proposed a controversial 0.5 per cent tax on mobile money withdrawals.
Parliament in October passed the Excise Duty (Amendment) (No.2) Act, 2018 despite resistance from Opposition MPs and a section of NRM legislators, who were defeated by government that insisted revenues from the tax were essential to finance the budget.
During the polarising vote in October, 164 MPs voted by roll-call and tally to support the tax, while 124 voted against the controversial tax.
Only 288 MPs voted out of the 463 MPs that constitute Parliament, meaning some 175 lawmakers were absent when Parliament was making a critical legislation that affects the many Ugandans who use mobile money.
State minister for Finance David Bahati confirmed that President Museveni has assented to the Bill but acknowledged that telecom companies were still charging 1 per cent on withdrawals.
“The President assented to the Bill within the specified law so the President was within the period that is specified in the law. There is nothing special about this,” Mr Bahati said.
Mr Bahati indicated that telecom companies will reduce the charges from 1 per ceny to 0.5 per cent on withdrawals only when the Act is gazetted in the Uganda Gazette.
“When the President assents to a Bill, it goes through the process of gazetting and after gazetting, it becomes law,” Mr Bahati said.
MPs opposed to the Act argued that there is no law to regulate the use of mobile money while also warning that mobile money services are already burdened with huge transaction fees, which has registered a decline in the number of users.
Civil society organisations, MPs and ordinary Ugandans also cited discrimination, lack of equity and clarity on the collection mechanism as reasons why the new law would be problematic to implement.
Background
The confusion. After massive public outcry, in early October, Parliament passed an amendment of a 0.5 per cent levy on Mobile Money withdrawals; revised downwards from 1 per cent that had been effected during the budgeting process before June.
In July, President Museveni directed that all those people whose Mobile Money tax deductions had been made on the basis of 1 per cent be refunded. In a statement on his blog, the President said the figure of 1 per cent came up by mistake.