Uganda Revenue Authority (URA) has failed to hit the target in the first quarter of 2018/2019 financial year after failing to collect the expected revenue from the newly introduced mobile money tax.
The URA collected a miserably Shs 103 billion from mobile money tax which is Shs 48 billion short of the targeted Shs 151.5 billion.
This tax, alongside the over-the-top (OTT) services tax that seeks to regulate social media usage, was introduced on July 1 following the introduction of the Excise Duty amendment Act by government.
Data from URA shows that, the tax body between July and September managed to collect Shs 103 billion from the 1% mobile money tax imposed on users of the service before the president clarified and reduced the amount to 0.5%.
Speaking to the press, URA Public Relationd Offcer Mr Ian Rumanyika, said debate that was heated over the introduction of new could have led to a shortfall.
According to URA, for the month of July, the one per cent charge on mobile money contributed Shs 22 billion (about $5.8 million), while the Shs 200 ($0.05) daily excise duty on social media use contributed Shs 4.3 billion ($1.1 million).
“With the new tax review from 1% to 0.5%, there is likely to be a major reduction of the URA collections in the second quarter of October to December”, Rumanyika told the press.
In August, just a month after the tax had been introduced, Bank of Uganda and telecom companies reported a sharp decline in mobile money transactions by a whopping Shs 672 billion. As if that is not enough, telecom company MTN Uganda, in recent times reported a 30 per cent decline in revenue since the taxes became effective.