PARLIAMENT – MTN Uganda and Airtel Uganda have urged the government to slash the excise duty on mobile money withdrawals from 0.5 percent to 0.25 percent and introduce a cap of Shs5,000 per transaction.
The telecom giants made the appeal on Wednesday when their officials appeared before Parliament’s Finance Committee to submit views on tax bills funding the 2026/27 national budget.
MTN’s General Manager for Corporate Services, Dennis Kakonge, told lawmakers the current levy unfairly burdens ordinary Ugandans. “When you send money for Parish Development Model, Emyooga, women down there will suffer the tax burden, they are your taxpayers,” Kakonge said. He explained that a Shs500,000 withdrawal attracts Shs2,500 in excise duty on the full amount withdrawn, plus 15 percent on the service fee. “This creates tax burden. Uganda taxes mobile money transactions more heavily than markets with larger digital economies and higher income. There is a need to address this challenge”, he added.
Airtel Uganda Managing Director Soumendra Sahu joined the delegation in pushing for the reduction, arguing it would boost transaction volumes and ultimately increase government revenue. The operators projected that a 0.25 percent rate could generate up to Shs80 billion annually in the short term.
The mobile money withdrawal tax was first introduced in July 2018 through the Excise Duty (Amendment) Act as a 1 percent levy on all transactions. Following public outcry and a sharp drop in usage, it was revised in November 2018 to 0.5 percent on withdrawals only.
The plea comes as Parliament debates several other tax proposals in the 2026/27 budget process. These include a 30 percent environmental levy on imported second-hand clothes, new excise duty of Shs500 per litre or kilogram on cooking oil and fat, Shs1,000 per 50kg on cement and related materials, higher duties on paints and imported spirits, and withholding taxes on land sales in urban areas and non-business assets.
Committee members expressed mixed reactions, balancing revenue needs against financial inclusion. The Finance Ministry has previously rejected similar reduction proposals for the coming fiscal year.
Source : www.chimpreports.com
