Mobile money fees increased before Parliament approval
A client is served at a mobile money kiosk in Namuwongo. PHOTO BY STEPHEN WANDERA
What you need to know:
If it is not approved by Parliament, telecoms which would have increased the rates will be required to refund the money.
Kampala
Telecoms have increased the cost of transfering money using the mobile money platform citing the 10 per cent tax on money transfers, even before Parliament approves the tax.
Yesterday, MTN and Uganda Telecom increased their rates while others—Airtel/Warid and Orange have indicated that they will be revising theirs soon.
MTN, for instance, adjusted its fees for sending money to registered and non-registered mobile money users by an average of Shs480, effective yesterday. They attributed the increment to the new tax on mobile money transactions as per this new financial year that started on July 1.
However, Parliament has not yet approved the proposed taxes yet for any new tax to become operational, it must have been endorsed by Parliament.
The vice chairman of the Budget Committee Mr Achia Remigio, however, told this newspaper yesterday that once announced, the new taxes automatically become operational on July 1.
He, however, added that if it is not approved by Parliament, telecoms which would have increased the rates will be required to refund the money.
However, with or without Parliament approval, various officials from the ministry of Finance and the Uganda Revenue Authority said at various post-budget meetings that the new levy should be borne by telecommunication companies, which have been reaping huge profits in mobile money transfers.
MTN’s new rates also come barely a month after MTN increased mobile money fees by between Shs100 and Shs200 on May 8, citing the need to enable the telecom company to improve service delivery and ensure a sustainable availability of its mobile money services across the country.
Some players earlier warned that the introduction of the levy will result into increased transaction fees, which could slowdown market growth. Airtel managing director Mr V.G Somasekhar said Airtel also plans to revise its rates upwards, saying telecoms in Uganda are not financially stable enough to absorb that tax on behalf of their customers.
Orange Uganda head of corporate affairs Maximilia Byenkya said the telecom might also be forced to increase charges for mobile money services, adding that the mobile money industry in Uganda is still in its infancy and requires a lot of investments to make it profitable.
She said just like any other tax/levy, if the tax payer does not find it feasible to absorb the tax it will inevitably be passed on to the consumers.
The volume of money transacted through the platform has also grown substantially over the years, hitting Shs11.7 trillion last year, up from Shs3.75 trillion wired through the platform in 2011. These figures are far higher than individual banks’ reserves and the number of bank accounts, which is estimated at about 4.5 million.
