Parliament's Budget Committee proposed tax on mobile money deposit transaction is unhelpful. The tax levy will undermine increased uptake of banking services among Ugandans. In a surprisingly short time, the mobile money service has caught on as part of Ugandans' everyday life, compared to commercial banks. This service has eased the burden of carrying cash around and exposing owners to risks.
This proposed tax by MPs in the new financial year will only undermine this convenient and low cost banking. To date,
However, the tax would frustrate rapid and cheap cash transfers. The platform has attracted formerly unbanked Ugandans to subscribe en masse to mobile money accounts. In 2012, alone, transaction by 8.9 million mobile money subscribers hit Shs11.7 trillion, up from Shs3.75 trillion in 2011. These figures overshadow individual banks' reserves and the number of bank accounts, estimated at about 4.5 million.
The proposed tax will only weaken this low cost banking.
The tax will only add costs on the service. Already in 2013/14 financial year, government imposed a 10 per cent charge on mobile money transfer, which has increased costs on wanainchi. So this move, more than regulate and spur growth in the economy, will instead slow down the less bureaucratic banking in
Part of the key reason Ugandans own cellphone is because of the mobile money platform despite handsets being more expensive for Ugandans.Government must first put in place a legal framework before rushing to impose a levy on mobile money transactions.
Most Popular Stories
- Small-Business Loans Fueling Economic Growth
- Tesco Head Steps Down After Profit Warning
- Comic-Con Offers Toy Designers a Chance to Go Wild
- Want a Job? Try Minneapolis
- Google Chrome Bug Draining Batteries: Report
- Clinton Wants U.S., E.U. to Get Tough on Russia
- Startup Makes It Easier to Buy American
- BlackBerry Appoints New COO from LiveOps Inc.
- GM Looking for Ignition Fix for Certain Cadillacs
- U.S. Stocks Start the Week on Shaky Ground