In July 2018, the Government of Uganda introduced two new excise tax specifically targeted at mobile services – a 1% excise tax on all Mobile Money transactions, and a UGX200 (or approx. $0.05) per user per day of access on Over the Top Services (OTTs). The excise duty rate on mobile money services was also increased from 10% to 15%. Following public outcry and pushback from industry, the Government made public comments to clarify that the Mobile Money tax had been ‘erroneously’ set at 1% and was only intended to apply to withdrawals. A parliamentary process to review the text of the legislation to reflect this and the ‘correct’ rate of 0.5%.
Since the new taxes were introduced in Uganda, we have seen similar actions proposed by the Governments of Zambia, Benin, with some reference in Tanzania and South Sudan.
Research ICT Solutions has published a paper highlighting the implications of the taxes. The GSMA and its local members in Uganda have also delivered written submissions to the Government and the Parliament of Uganda advocating against the new taxes. The GSMA will be working with its members on an Advocacy strategy to speak to this worrying developing trend.