Finance minister sued over mobile money tax

KAMPALA.

The Finance minister Maria Kiwanuka has been sued for allegedly recognizing mobile money services as an economic activity which is against the financial institutions’ Act and the constitution of the Republic of Uganda.

Mr Joshua Tumwiine, a private tax consultant and economist and the petitioner in this case blames Ms Kiwanuka for unlawfully imposing a 10% tax duty on Mobile money withdrawal fees in the recently concluded 2014/2015 budget read to parliament on 12th/06/2014.

Mr Tumwiine claims that the financial institution’s Act and Bank of Uganda do not recogonise mobile money operators as one of the financial institutions that they regulate thus the minister’s actions amount to aiding and abetting a criminal offence.

In the National Budget, Minister Kiwanuka stated that so far 14 million Ugandans are able to use mobile telephones and they account for a transaction value of 18 trillion shillings ordering URA to collect a 10% tax on each withdrawal.

“The ministerial act of recognizing the business and taxation of mobile money services pursuant to the National Budget amounts to legitimisations Act 2004, is an act which undermines the rule of law in business and is inconsistent,” reads part of the complaint filed before the Constitutional Court in Kampala.

Mr Tumwiine further contends that taxing mobile money by that percentage only serves to promote unequal and discriminatory treatment before and under the law.

Cosnsequently, Mr Tumwiine wants court to declare the minister’s act of recognizing Mobile money businesses as illegal and also issue a permanent injunction restraining the continued charge of 10% from withdrawals.

The Attorney General who is listed as one of the respondents has, in his defense denied all the allegations of legitimizing an illegal trade and asked court to dismiss the petition with costs.

Mr Tumwiine in his complaint also sued Uganda Revenue Authority(URA), but the authority also denied all allegations, arguing that the applicant (Mr Tumwiine) does not understand the relationship between licensed Financial Institutions and the Mobile Money Services Providers.

URA also contends that the minister’s act of imposing tax on mobile money services under the National Budget does not aid or amount to a criminal offence, under the Financial Institutions Act 2004 and neither is it inconsistent with Articles 2,20, 28, 40,79 and 162 of the Constitution of the Republic of Uganda like Mr Tumwiane alleges.