Govt has misled Ugandans on mobile money tax, and as usual abused their trust

After more than a month, President Museveni this week assented to the Excise Duty (Amendment) (No.2) Act, 2018, that proposed 0.5 per cent tax on mobile money withdrawals.
The Bill was passed by Parliament early last month, revising the mobile money taxes downwards to 0.5 per cent from 1 per cent as passed in the Budget.
According to State minister for Finance David Bahati, telecom companies will reduce withdraw taxes from 1 per cent to 0.5 per cent after the Act is gazetted in the Uganda Gazette as is the process of an Act becoming law.
Both the public, who are stressed and disturbed by the 1 per cent mobile money tax deductions currently being charged, and telecoms companies, that are grappling with reduced transactions, have experienced crippling business effects with a sharp decline in mobile money use.
According to Uganda Revenue Authority (URA) in the month of July alone the 1 per cent charge generated Shs22 billion ($5.8 million) and in the first quarter, July to September, a staggering Shs103 billion was collected from the 1 per cent mobile money tax, falling short by only Shs48 billion from the Shs151.5 billion URA had projected.
Although the public should rejoice over the prospect of improved service delivery by government, that is not the case. Ironically, it is government instead that seems to be happy having successfully created confusion around mobile money tax, managing to collect hundreds of millions per day from the mobile money transactions.
According to economist Birskyte Liucija, taxpayers are motivated to support a trustworthy government. If citizens believe that the government will act in their interests with fair procedures, they will pay taxes.
It would appear that for the ruling party, what is important beyond the public’s trust is quenching their thirst for taxpayer’s money, having intentionally created no mechanisms, little to non-existence powers through which the public can request for accountability from the ruling party.
As lack of accountability rules, more disappointment seems to be on the way. The prospect of mobile money tax refund previously communicated by President Museveni may not be realised.
Secretary to the Treasury Keith Muhakanizi, also the Permanent Secretary in the ministry of Finance, came out to say there will be no refund.
“The ministry has already spent the money on services enjoyed by Ugandans. There is no refund because money was collected legally,” Muhakanizi said recently.
Government may have mislead the public with false information from the initial introduction of the Bill, but what they have also done is abuse the public’s trust which, sadly, a normal occurrence nowadays.