The government is in plans to impose excise tax on agency banking and ATM withdrawals in the commercial banks.
According to a letter dated February 9, 2021 by Patrick Ocailip, the deputy secretary to the treasury in the Ministry of Finance written to the Governor Bank of Uganda, they seek an opinion and data not later than Friday, February, 12, 2021 on the matter.
The proposed tax was reached at last week in a budget consultative meeting between the Ministry of Finance, Uganda Revenue Authority (URA), Uganda Communications Commission (UCC), Telecom Operators and Bank of Uganda (BoU).
“Following our budget consultative meeting held on February 5th, 2021, at this ministry attended by officials from Uganda Communications Commission, Ugandan Revenue Authority, Telecom Operators and Bank of Uganda, it was proposed that we explore taxation of cash withdrawals, from commercial banks,” reads part of the letter.
Currently, mobile money withdrawals are subject to a 0.5 percent excise duty while agency banking and ATM withdrawals in commercial banks are not subject to the same tax.
“We, therefore, wish to seek your opinion on the proposal and also request you to avail us with data on all categories of withdrawals for our further review and determination. We require tis date for the past three financial years (starting from FY 2017/18).”
According to the government, this will encourage cashless transactions and promote e-commerce, improve tax compliance in addition to raising revenue.
Ugandans will have to pay yet another tax, this time on withdrawals from commercial banks if finally considered by the government.