Mobile Money Tax


What is this tax?

Government of Uganda has amended the Excise Duty Bill and introduced a 1% tax on the mobile money transaction value. From July 1rst, service providers have been mandated to apply it to:

§Depositing
§Receiving
§Payments
§Withdrawals

For which transactions MTN Mobile Money subscribers will pay the tax?

§Deposit – I give 10,000 Ugx to an agent and I receive 9,900 Ugx on my wallet
§Withdraw – To get 200,000 Ugx in cash, the agents withdraw 205,575 Ugx on my wallet: 200,000 + 3,575 for the fees +2,000 for the tax
§Mobile Money transfer – When I sent 200,000 Ugx the receiver will receive 198,000U Ugx: 200,000 – 2,000 for the tax
§Mokash – When I request for a 100,000 Ugx loan, I will receive 99,000 Ugx on my account: 100,000- 1,000
§Bank to Wallet – When I pull 1,000,000 Ugx from my bank account, I will receive 990,000 Ugx on my mobile wallet: 1,000,000 - 10,000
§Salary payment – When I pay my employee using mobile money, they will receive the amounts deducted from 1%​.

Which are the transactions where MTN is not applying the tax to the Mobile Money subscribers?

§Buying Airtime, data or MTN bundles – Tax does not apply when I buy Airtime using Mobile Money. I pay 10,000 Ugx and I receive 10,000 in airtime
§MoMoPay – If my bill at the restaurant is 10,000Ugx I will still send 10,000 Ugx using *165#
§Bill payment – The tax does not apply to the subscriber, But some companies may decide to pass it to the subscriber. E.g., UMEME will give you 1% less units
§Wallet to Bank – When I want to transfer 100,000Ugx to my Bank account no tax apply. But some Banks may decide to pass it to the user and only transfer only 99,000​.