Makerere University Guild and a section of mobile-money vendors have petitioned the Speaker of Parliament, Rebecca Kadaga to intervene and cause the review of the recently passed Excise Duty (Amendment) Act. The law imposes a one per cent excise duty on Mobile money transactions and shs200 on over the top services on social media.
The students argue that the new social media tax has adversely affected their the convenient for sharing educational materials and opportunities.
“This policy seems to have double or even multiple taxation on it. For instance, when we buy airtime, we are charged 15 per cent indirect tax and then shs200 to access social media,” said Mark Owiny, Justice Minister at the Makerere University Guild.
The groups presented their petitions while meeting the Speaker on Monday, 9 July 2018
Owiny noted that according to the Act, excise duty on OTT services was supposed to be levied on services that do not include educational services, of which some social media applications sufficed for academic platforms.
He added that the tax was being levied wrongly as per the Amended Excise Duty Act saying, “The Excise Duty (Amendment) Act states that the tax is to be paid by the service provider of the particular commodity, not the consumer of the commodity.”
He called on the Speaker to call for revision of the tax to favour students across the country.
Kadaga said that the Act and its particulars will be studied before it is debated for any further amendment saying, “What you are speaking to is right of access to information which is not only under the constitution but we have a law which requires the Government to facilitate access”.
The group also noted that mobile money in rural areas was being used as a banking system especially to pay tuition fees but the excise duty on the service was affecting such payments.
“Last week, my parents sent me shs1 million for tuition; on withdraw from mobile money, I got only shs948,000. The agents told me that the rest was tax on mobile money transactions,” Owiny said.
Kadaga added that she would present the issue before the House when it resumes sittings on Wednesday, 11 July 2018.
“I will speak to the House on Wednesday about this matter so that we can start a review on this duty. You will hear from us after that,” Kadaga added.
The mobile-money vendors represented by Boaz Byamukama noted that the proposed 0.5 per cent would have negative effects on revenues expected to be collected by Government.
“A transaction of shs2 million costs shs21,800, but with the introduction of the 0.5 percent tax, the cost would go to shs51,521 which indicates an increment of shs29,721,” Byamukama said.
He noted that the increment would continue to discourage the public from seeking the services of mobile money vendors countrywide, suggesting that Government ought to charge the tax indirectly so that the customer, “should not feel the pinch.”
In this regard, Kadaga promised to pick up the proposals by the group on alternative sources of raising revenue.