ISO Director General Col. Kaka Bagyenda

Somewhere in the course of his job of nosing into peoples’ business, Internal Security Organization’s top boss, Col Kaka Bagyenda stumbled on information showing that Shs2 trillion is transacted through mobile money annually.

He immediately rang the president and requested for a meeting. To the meeting, he went with an intelligence report showing that despite the Shs2 trillion making rounds on the mobile money platform annually, telecom companies led by MTN were having the cake all to themselves.

In that meeting, Col. Kaka suggested to the president that government should only take 1 per cent of the Shs2 trillion (Shs20 billion) and leave the rest to the telecom companies.

“They came and investigated the claims in that so called intelligence report from him and they found nothing. But they were hell bent on taxing the Shs2 trillion which they thought was being taken by us,” a top in house lawyer of one of the leading telecoms who was part of the intense meetings between government and the telecoms told Eagle Online.

He added, “They wanted to push the taxes on to us but we refused arguing that it is not our money but people’s money and that if they wanted to tax it they should tax the owners. There was no way we were going to pay tax on money we do not own.

“We told them that Mobile Money has two pools. The deductions by the telecoms and the money owned by the account holders. We pay tax on our telecoms pool. We refused pay tax on behalf of the second pool.”

According to the lawyer, government officials in the discussions failed to understand that taxing mobile money will be taxing the movement of money instead of the value that money has created.

“If I have money in my wallet and I want to put on my mobile wallet, it will be taxed 1 per cent. What value has that money created for it to deserve being taxed? If all people were keeping their money in pots at home, would government have introduced a pot tax?

“We argued against taxation on the velocity of money because you only end up hurting people’s incomes without justification. Money should be taxed because of the value it has created, not because it has been moved from one one pocket to another,” the lawyer, who spoke on condition of anonymity because he is not supposed to speak on behalf of his employer said.

Over the weekend, government activated a 1 per cent tax on Mobile money transactions and another controversial social media tax of Shs200 per day for one to access any social media platform.

Some people have resolved to challenge the taxes in courts of law.

Asked whether he sees any chance for success in the individuals petitioning the courts of law especially on the social media tax, the lawyer said it will be very big luck.

“We were involved in long hard discussions. Even the US Ambassador to Uganda personally wrote a letter to the president but it did not yield anything. For now the people will shoulder the burden,” he said.