Subscribers Sue URA, Telecoms Over Mobile Money Tax Deposits Top story

3169 Views Kampala, Uganda

In short
Through their lawyer, Eron Kiiza, the applicants contend that URA recently admitted that the deduction on mobile money deposits was erroneous.

 Two mobile money users have sued Uganda Revenue Authority and three telecom companies for taxing Mobile Money depositors arguing that the taxation is illegal and was done in error. The telecoms are MTN, Airtel and Africell Uganda Limited. The complainants are John Robert Turyakira and Anthony Odur.

In their application before the High Court Civil Division, the applicants want court to order the respondents to reimburse all the money deducted from mobile money depositors as tax. The suit stems from the 1 percent levy slapped on all mobile money transactions by government effective July 1, 2018.

The petitioners also want an injunction restraining any further erroneous taxation or collection and enforcement of taxes on any mobile money deposits as well as general damages and interest on the tax deducted from deposits. 

Through their lawyer, Eron Kiiza, the applicants contend that URA recently admitted that the deduction on mobile money deposits was erroneous.

The applicant claim that despite the clarification by the tax body, the telecoms have continued deducting money from depositors yet they claim it was a mistake. The URA Commissioner General, Doris Akol wrote to the telecom companies on July, 4th, 2018, 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. 

The applicants contend that the respondents know where and from whom the money was collected and should therefore refund the same they collected it.
The court registrar is yet to summon the respondents to file their defense before the matter goes for hearing. John Robert Turyakira, one of the applicants spoke to URN he has suffered with the tax.

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Lawyer Eron Kiiza speaking in English

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Statistics from Bank of Uganda show that there are 22 million mobile money subscribers whose transactions stood at Shillings 54 trillion as of 2017.