Other alternatives to Mobile Money Tax should be considered

Friday May 4 2018


By Julius Kapwepwe Mishambi

A lot of hullabaloo has so far been raised about various tax proposals, particularly the malaise facing multi-taxing of citizens through mobile money tax.

For now, I will quickly note that with already 10% high charge by  Mobile Network Operators in Uganda on the money a customer sends and/ or receives,  anybody who proposes additional  tax through three new separate charges on mobile money money (a) deposit (b) receiving and (c) withdrawal, of the same unit of shilling will only need to make an elaborate explanation or be treated with suspicion by citizens.

In this first part,  nonetheless, I will forward a few alternatives to further inform debate and more viable proposals for Financial Year (FY) 2018/19 going forward.

First, Ugandan taxpayers are suffering with a hefty budget through footing the monthly bill of Public Service Pension.

Beyond being taxed (with annual tax increments and new sets of taxes), the same taxpayers meanwhile foot their own pension bills to NSSF and elsewhere.

 Sections of the same supported Public Servants only deliver services to a taxpayer after being bribed handsomely or through kitu kidogo.


Yet sections of the same Public Servants remain a problem to taxpayers, where for instance out of the 25,000 public servants that declared their wealth and liabilities to the Inspectorate of Government (IG) in 2018, about 23,000 were allegedly doubted and qualified for investigations by the IG, particularly, about their wealth.

So, shouldn't we rather propose that just like other Ugandans, the Public Servants should contribute to their pension off their income?  This way, we lessen this extent of the burden off the national budget in FY 2018/19.

A pension scheme that is not being contributed for by the direct beneficiaries is no longer tenable in Ugandan economy that is struggling to float. 

Secondly, it’s a fact that Rwanda will in the FY 2018/19 fund its national budget up to 84%, this being a tall achievement and best done so far ahead of any of the five East African Community States.

Arguably, the majority of the ladies and gentlemen making things happen in Kigali have not only obtained their early-life security and livelihood in Uganda, but also actually benefited from the generosity of any Ugandan who shielded and fed them.

 They went to our schools for lower, upper and tertiary education on Ugandan tax payers’ money- even later benefiting from Universal Primary Education (UPE); as well as health care system including the Primary Health Care (PHC) for medical attention and training, too. 

Remember even with the military launch using weapons by Ugandan taxpayers that form the yoke of success of the Rwandese Patriotic Front- Inkotanyi (RPF) and eventual government, some Rwandans went home later in 1990s, so partook of UPE, PHC and other such programmes that Uganda had hard-earned from the campaign under the Highly Indebted Poor Countries Initiative (HIPC) in 1990s. Even then, the extent of contribution by Rwandans towards recovering from the economic, human rights and political doldrums cannot be under-estimated.

With Ugandan economy rather sick today, albeit (e.g. with declining and low GDP growth over the last four years and below 54% funding of own budget in FY 2017/18, is it time to request Rwanda to contribute to Uganda's revenue endevours from FY 2018/19 say for the next 15 years, in a way as a thank you gesture and camaraderie to Ugandans? An annual contribution by Rwanda of equivalent to say  2% of her budget to Uganda would gladly offset the craze such as this around perpetual taxing of mobile money users. Such said 2% contribution can even be ear-marked for Uganda budget projects that have a direct positive correlation with Rwanda's economic development- including power lines.

 Tanzania Railways Corporation, Tanzania Ports Authority and Marine Services Company of Tanzania have extended financial support to Uganda to open up Dar-Mwanza- Port Bell railway line and make Dar port more profitable.

 In this tripartite katogo, Ugandans businesses will register lower cost of doing business and lower consumer costs of goods, with a tonne transported for about $75 from the current over $95.

Back to this tax craze, remember the mobile money has been a key instrument in extending support to refugees who are in millions in Uganda.

Rwanda would join some of us against any measures that would adversely affect the financial and health being of the refugees; for Rwandans understand a bit of what it means to be a refugee.

Finally, we have gone a long step towards rejuvenation of East African Community since. Can we go back to the situation of 1940s through 1960s when the East African Community of Kenya, Tanzania and Uganda had one joint Embassy across the globe?

 Why should we in the FY 2018/19 continue to spend hefty sums of resources to maintain separate Embassies, High Commissions and Consulars for each of the five EAC states? We already are issuing joint EAC tourist visas, why can’t we extend this to other areas and reduce burdens through our budgets?

The EAC should drive to one joint foreign mission with rationalized costs across the EAC national budgets. This offsets pressures for money even in Uganda's budget proposals for FY 2018/19 where multiple taxing of a citizen say under proposed mobile money craze can be moderated.

Julius Kapwepwe Mishambi  is the Director of Programmes