By Andrew Irumba
President Yoweri Museveni through his prime minister and head of Gov’t business Dr.Ruhakana Rugunda has directed that the controversial social media and mobile money taxes be debated afresh by parliament with a view of ‘considering’ the public outcry. “Government proposes an amendment to the Excise Duty (Amendment) Act 2018, which imposed taxes on Mobile Money transactions and social media tax known as over the top (OTT) services,” part of Museveni’s message through his PM Dr.Ruhakana Rugunda said.
This, means that the act empowering Gov’t to impose such tax could be amended and the taxes dust binned. Pundits said his change of heart could have been due to public’s out right anger and protests that marred better half of last week and spilled over Wednesday 11th July. Wednesday’s unrest in the capital city Kampala with the slung #ThisTaxMustGo, #PeoplePower #OurPower was ‘commanded’ by Kyadondo East Mp Ssentamu Kyagulanyi aka Bobi Wine who was joined by among others fellow artistes,lawyers, journalists and the general public.
Prime Minister Rugunda on wed.laid to rest citizens’ fears when he carried his master’s message from state house Entebbe with possibilities that the law can be recalled!
Read full statement from the president through his right hand man,ndugu Rugunda verbatim……
“STATEMENT TO PARLIAMENT BY THE RT.HON PRIME MINISTER ON THE RECENTLY INTRODUCED TAXES ON MOBILE MONEY TRANSACTIONS AND OVER THE TOP SERVICES (OTT)
Rt.Hon. Speaker I present this statement under rule 51 (1) of our rules of procedure.
Rt.Hon. Speaker and Hon.Colleagues, as you are all aware; there has been a lot of public discussion about the recently introduced taxes on Mobile Money transactions and Over the Top Services (OTT) commonly known as social media.
Rt.Hon. Speaker and Hon. Colleagues, the Excise Duty (Amendment) Bill 2018 was presented to this August House, debated and passed by this Parliament. It was subsequently assented to by His Excellency the President and consequently became an Act of Parliament.
The Act imposes a 1% Levy on receiving, payments and withdraws through mobile money platforms. In addition, it imposes a specific charge of Uganda Shillings (shs.) 200 on over the top (OTT) services per day of access.
Rt.Hon.Speaker and Hon.Colleagues, since the Act came into force on 1st July 2018; Government has noted public concerns regarding some of the elements in implementation of especially tax on mobile money transactions and OTT.
H.E. the President has provided guidance on the matter and encouraged further discussion with a view to reaching consensus on how we should raise the much needed revenue to finance our budget and undertake the development agenda we have set for ourselves without causing unbearable burden to the citizens.
Rt.Hon.Speaker and Hon.Colleagues, Government is now reviewing the taxes taking into consideration the concerns of the public and its implications on the budget.
The review is being expedited to ensure that Government presents an Amendment of the Excise Duty (Amendment) Act 2018 to this House for debate on Thursday next week (19th July 2018) Hon. Members will therefore have the opportunity to debate and consult widely to guide Parliament during the consideration and debate of the Amendment Bill.
Rt Hon. Speaker and Hon Colleagues, I would like to assure this Parliament that Government is committed to ensuring that the tax on mobile money and OTT are designed taking into account the public concerns and balancing the need to raise revenue to finance our development agenda.
I thank you
Ruhakana Rugunda (Dr)
Prime Minister/ Leader of Government Business
11th July 2018”
The one per cent tax on Mobile Money transactions covers deposits, sending and withdrawals.
Over The Top (OTT) platforms like WhatsApp, Facebook, and Instagram among others effective July 1st 2018, remain accessible after payment of Shs200 daily only via mobile money.
Government is now to review the taxes, taking into account the concern of the public and its implication on the budget, Rugunda said.
Rugunda promised to introduce the amendment on Thursday, 19 July 2018, which wouldl now take the normal route of an amendment Bill.
Meanwhile, MPs from the Opposition said on Thursday that the attendant processes are far too long.
“This is an admission that the tax is a bad one; Ugandans are being subjected to extortion,” said Lubaga North MP Moses Kasibante, wondering what will happen as Parliament processes the amendment.
MP Cecilia Ogwal (FDC, Dokolo) wants the deductions reimbursed to Mobile Money subscribers as they debate about the Bill. “May we know where the money is being kept and how much has been collected so far…you must return the money that has been collected from the people,” said Ogwal.
Government has been under intense criticism by a section of the public following the implementation of the law.
There has also been denials and blame games by Finance Minister Matia Kasaija, who local media quoted as feigning ignorance about the tax law.
Kadaga deferred debate on Rugunda’s statement pending her ruling on what happens to Mobile Money subscribers while an amendment is being processed.
In an article shared on his twitter handle @KagutaMuseveni, President Yoweri Museveni last week said the proposal was to have the tax levied at the rate of 0.5 and not one per cent.
Museveni also said the tax was intended to draw the informal sector into the tax base and to widen the tax to Gross Domestic Product (GDP) ratio, which is the region’s lowest at 14 per cent.
Rugunda hinted at having the amendment “take into account the public concern and balancing the need to finance our budget,” meaning government will be torn between raising revenue and responding to public concerns on the much criticized taxes.
Article 93(a) of the Constitution restricts Private Members from introducing Bills on taxation other than by reduction, making it a preserve of the government through the Finance Ministry.
Earlier in her communication, the Speaker called for consultations with all stakeholders when considering bills.
This she said follows several petitions that she received from the public concerning the two taxes that were imposed.
The Speaker directed the Clerk to follow up on an application that will help the public peruse Bills before they are debated on the Floor.
“I had instructed the Clerk to create an application where the public, upon publication of the Bill, can contact Members online and have their ideas and suggestions therein,” she added
