Mobile Money Tax Petitioners Drop Telecoms from Suit

2060 Views Kampala, Uganda

In short
Following the consensus, Justice Sekaana ordered URA to file written submissions showing why the case should be ruled in their favor.

Mobile money users challenging the mobile money tax have dropped telecom companies from their suit. The petitioners dropped the charges while appearing before the Civil Division of High Court this morning, saying telecoms acted on instructions from Uganda Revenue Authority. 


In July this year, two mobile money users including John Robert Turyakira and Anthony Odur dragged Uganda Revenue Authority, MTN, Airtel and Africell Uganda Limited Companies for a charging the one percent tax on all mobile money transactions. They argued that the levy was illegal and done in error.

Through their lawyer, Eron Kiiza, the petitioners asked court to order the respondents to reimburse all the money deducted from mobile money depositors as tax. They asked court to direct the respondents to return the money expeditiously the same way they collected since they knew where and from whom they had collected it.

This morning, all the parties with exception of Africell appeared before Justice Musa Sekaana of Civil Division for the hearing of the matter. The petitioners told court that they had agreed to exonerate the telecoms from the case basing on the facts of the case. The petitioners said they agreed with the telecoms that they only acted under instructions from Uganda Revenue Authority. 
They therefore resolved to drop the telecoms from the suit in the presence of the lawyers of the companies. Each party agreed to meet the costs of the suit since the matter is of public interest. Counsel Nicholas Mwasane represented MTN; Richard Bwayo represented Airtel while Ronald Baluku represented Uganda Revenue Authority.


Eron Kiiza, the petitioner's lawyer confirmed the development in an interview with URN.
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Following the consensus, Justice Sekaana ordered URA to file written submissions showing why the case should be ruled in their favor. 
The applicants are expected to submit their written submission by September, 17th, 2018 while URA will submit hers by October 1st, 2018. Court is expected to deliver its ruling on November, 16th, 2018. On July, 4th, 2018, the URA Commissioner General, Doris Akol wrote to the telecom companies clarifying that they shouldn't tax mobile money deposits. 

"Payments for any taxes using the mobile money platform including over the top services excise duty, does not constitute a payment within the meaning of the provision. However, payments for other services such as utilities and any other payments are subject to 1 percent excise duty ", reads the letter in part. 

On July, 13th, President Yoweri Museveni in a statement said that Ugandans who paid the 1% per cent mobile money tax should be refunded. He insisted that the 1 per cent tax which he ordered to be reduced to 0.5 per cent was passed in error and he signed the bill knowing it had an error.

Since then, Airtel Uganda customers say that they have received all the money that was charged on deposits, but MTN customers claim that they received blank messages. There are 22 million mobile money subscribers whose transactions stood at Shillings 54 trillion as of 2017.