MTN Uganda says daily mobile money transactions have dwindled to about UGX 50 billion from an average of UGX 100 billion, a 50% slash off the top, as reported by The Monitor. The drop comes closely after the implementation of the 1% mobile money tax on the 1st of this July. MTN mobile money general manager, Elsa Muzzolini, told The Daily Monitor that the tax had already greatly impacted their business, and is highly likely to continue doing so.
Muzzolini said MTN would facilitate the transfer of about UGX 100 billion daily before the tax was introduced, which has reduced to about UGX 60 billion or UGX 50 billion. She adds that this is very bad news to the operator and the economy at large. She said the tax has slowed down the flow of money through mobile money, especially for large transactions.
The 1% mobile money tax is currently under review in Parliament. President Museveni has said the 1% rate had been a miscommunication, indicating that Cabinet had only agreed on 0.5 percent and only on withdrawals. The Uganda Revenue Authority had initially directed the tax to be levied on all mobile money transactions but it currently applies only to withdrawals.
Muzzolini said the government has also experienced a cut in revenues, a reduction from 50% to 30% as people abandoned mobile money, with some taking to banks and physical movement of cash. She said MTN’s more than 100,000 agents have been greatly affected, with some contemplating closing down their business.