Mobile Money Tax Increases Cost of Doing Business-Study

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In short
The results indicate that overall 71 percent of businesses posted increases in the cost of doing business as a result of the tax. Among businesses who reported an increase in costs, 87 percent reported a cost increase between one and 25 percent.

A study by the Economic Policy Research Centre indicates that 71 percent of businesses registered an increase in the cost of doing business as a result of the mobile money tax.

 
Government introduced the tax in the 2018/19 budget, initially charging one percent each on all mobile money transactions like depositing, sending, receiving and withdrawal.

 
After bitter public uproar, including protests, the government backed down and only retained the tax on withdrawal and reduced the tax to half a percent.

 
Although the government had initially promised to refund some of the tax paid, it reneged on the promise arguing that the charge then was legal since the president had assented to the budget although.
 

The EPRC sought to understand the impact of the introduction of excise duty on mobile money transactions comprising receipts, payments and withdrawal as at a rate of one percent of the transaction value.

 
The question asked was: Has mobile money tax increased the cost of doing business in this quarter? The quarter being July to September 2018, the first quarter when the mobile money tax was operationalised.
 

The results indicate that overall 71 percent of businesses posted increases in the cost of doing business as a result of the tax.

 
Among businesses who reported an increase in costs, 87 percent reported a cost increase between one and 25 percent.

 
Four percent of businesses reported cost increases of 50 percent.

 
With over 22 million people using mobile money services, it has become a critical financial platform that is now accommodating several financial and payment options.
 



 

 

About the author

David Rupiny
In his own words, David Rupiny says, "I am literally a self-trained journalist with over 12 years of experience. Add the formative, student days then I can trace my journalism roots to 1988 when as a fresher in Ordinary Level I used to report for The Giraffe News at St Aloysius College Nyapea in northern Uganda.


In addition to URN for which I have worked for five years now, I have had stints at Radio Paidha, Radio Pacis, Nile FM and KFM. I have also contributed stories for The Crusader, The New Vision and The Monitor. I have also been a contributor for international news organisations like the BBC and Institute for War and Peace Reporting. I am also a local stringer for Radio Netherlands Worldwide.


I am also a media entrepreneur. I founded The West Niler newspaper and now runs Rainbow Media Corporation (Rainbow Radio 88.2 FM in Nebbi). My areas of interest are conflict and peacebuilding, business, climate change, health and children and young people, among others."