By Peter Ssebulime
Civil Society Budget Advocacy Group (CSBAG) has warned Government on the
Proposal to impose 1% on all mobile money transactions, arguing that such a tax is a regressive measure that will hurt mostly the poorest segments of the population.
While Speaking to the media at their office at Ntinda, a Kampala suburb last week, the Executive Director Julius Mukunda noted that the proposed tax can make the adoption of mobile money especially in the lower segments much more difficult, suggesting that it should be reduced to at least 0.3%.
He said that more than 10 million Ugandans have been able to access financial services because of mobile money. “Even farmers currently use mobile money to facilitate 53.5% of their annual payments, imposing the 1% transactional levy will see this number dropping by 5.9%”, he said.
Mukunda asked Parliament to consider the tax alternative that promote equity, fairness and less harmful to the economy of the country and its people.
He added that the current proposal minimizes risk loss or theft because cash transaction is highly associated with loss and theft on accounts because transaction can be blocked instantly when theft is detected.
Mukunda further noted that a cashless economy prevents many crimes associated with cash such as fake currencies, terror financing, and black money circulation and helps in tracking of their spending and also facilitates Government agencies in collection of their taxes.
Civil Society Budget Advocacy Group (CSBAG) is a coalition formed in 2004 to bring together CSOs at national and district levels to influence Government decisions on resource mobilization and utilization for equitable and sustainable development. CSBAG was created out of a desire to collectively influence government and effectively participate in setting national budget priorities.