Why URA wants list of mobile money agents

Uganda Revenue Authority (URA) has written to the Bank of Uganda to compel commercial banks and mobile money financial companies to publish a list of their agents to enable effective tax collection. PHOTO/ FILE

What you need to know:

  • URA says their analysis  has found out that many agents aren’t registered to pay taxes.

The Uganda Revenue Authority (URA) has written to the Bank of Uganda to compel commercial banks and mobile money financial companies to publish a list of their agents to enable effective tax collection.
In a February 23 letter, Mr John Musinguzi, the URA commissioner general, said their analysis of the banking and mobile money financial services has found out that many agents aren’t registered to pay taxes.

“In a bid to ensure tax compliance, we appeal to you to ensure that all commercial banks and mobile money financial service providers operating digital wallets register for taxes in accordance with the law and require them to regularly publish and update the lists of their banking and mobile money agents on their websites,” Mr Musinguzi wrote to the Governor of Bank of Uganda. 
Mobile money agents are supposed to earn a commission per transaction they make. URA takes six percent of each commission transacted as withdrawing tax. Financial agencies collect the money and remit it to the tax collectors.
The URA assistant commissioner for public corporate affairs, Mr Ibrahim Bbosa, said the exercise is aimed at closing gaps in tax compliance, especially sectors where it is low.
“There are some agents who haven’t been registered for tax meaning either they don’t have TIN numbers or when the telecoms withdraw, they don’t submit the revenue with identifiable TIN numbers,” Mr Bbosa said.

He said they want to know the person the financial service provider is withdrawing tax from for proper accountability.
Mr Richard Yego, the MTN Mobile Money chief executive officer, yesterday said his company has received a similar letter and they would comply with the URA standards.
“We have been withdrawing. It is just we have not been attaching the TIN (Tax Identification Number)….,” Mr Yego said, adding that before, it wasn’t a requirement.
He said they are to engage their agents about the new tax requirements and that it might take some time to complete.
MTN has more than 200,000 agents across the country.

He said publishing the list of their agents on the website is a “sticky” issue because it may result in the company being sued over privacy laws and could also be misused by fraudsters.
Mr Yego said they have written to the Bank of Uganda to guide them on how to proceed with it.
Mr Wilbrod Owor, the executive director of Uganda Bankers Association, said there is no problem with what URA is requesting for and they would do it since what the tax collectors want is public information.