By KT Reporter
Telecom companies MTN Uganda and Airtel Uganda have asked government to reduce the tax on mobile money withdrawals from 0.5 per cent to 0.25 per cent and introduce a cap of Shs5,000 per transaction.
The proposal was presented before Parliament’s Finance Committee by MTN Uganda’s General Manager for Corporate Services, Dennis Kakonge, and Airtel Uganda Managing Director, Soumendra Sahu, as part of submissions on tax bills linked to the 2026/27 national budget.
MTN Uganda said it was not seeking to abolish the tax entirely but argued that a lower rate would encourage higher transaction volumes while still enabling government to raise revenue.
Kakonge told legislators that reducing the levy would make the tax more sustainable for users and support the growth of the mobile money ecosystem.
Meanwhile, Airtel Uganda proposed scrapping the 10 per cent import duty on smartphones priced below Shs500,000 to increase access to digital services.
According to Airtel Money Managing Director, Japhet Aritho, making smartphones more affordable would bring more Ugandans into the digital economy and expand the tax base through increased data usage and related taxes.
Lawmakers, however, expressed mixed views on the proposals.
Paul Omara, the Otuke County MP, supported the review of mobile money taxes, arguing that current charges have made withdrawals more expensive than banking transactions and are undermining financial inclusion.
On the other hand, Karim Masaba cautioned against extending the reduced tax across both banking and mobile money platforms, warning it could increase transaction costs and discourage use of formal financial systems.
The Chairperson of the Finance Committee, Amos Kakunda, also questioned telecom companies for not addressing proposals to introduce withholding tax on mobile money agents.
Kakunda said the committee will continue engaging stakeholders to strike a balance between revenue generation, financial inclusion, and the promotion of a cashless economy.
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