Parliament has endorsed government plans to tax mobile money transactions in the next financial year but little did the legislators know that a citizen had run to court earlier asking for an injunction, reasoning that currently there is no law Uganda regulating that business run by telecom companies.
On Wednesday May 30, parliament approved the tax amendment bill where among others each mobile money transaction in the country will be subjected to a 1 per cent excise duty.
Mathew Kiwunda, an advocate of the High Court has particularly sued the Attorney General and the Minister of Finance, Planning and Economic Development. He contends that government has failed to pass a law for the operationalisation, licensing and regulation of mobile money services in Uganda. He argues that failure to have the related law in place is unlawful, irrational and unreasonable.
Mr Kiwunda is to be represented by M/S Muwema &Co Advocates and Solicitors on September 4, 2018 when court will hear his petition. He petitioned court on May 7, 2018. And the petition was received by court on May 8, 2018 under case No. 103 of 2018.
The Ministry of Finance and that of Justice and Constitutional Affairs confirmed receiving Mr Kiwunda’s petition on May 30,2018, the same day MPs said that the 1 percent tax be imposed on mobile money transactions in the coming financial year 2018/19 as government widens the tax base to fund development projects and service delivery.
The plaintiff wants court to compel government to present a bill to parliament and parliament to enact an appropriate legislation without delay for the operationalisation, licensing and regulation of mobile money services in Uganda.
He further wants court to prohibit government from continuing to level, impose or collect any tax or taxes on all mobile money transactions in Uganda until proper legislation relating to the service is put in place. Kiwunda who says he uses mobile money services, also wants costs of the application be provided.
Kiwunda claims mobile money services…were introduced…without a supporting legal framework under the Financial Institutions Act N0.2 of 2004 or the Uganda Communications Act, 2013.
Despite Bank of Uganda providing guidelines on mobile money transactions in the country, Kiwunda says it does not have legal bindings since it doesn’t have regulatory control of the telecoms sector now handling business estimated to be more than Shs40 trillion annually.