KAMPALA – The two biggest telecom companies, MTN and Airtel Uganda, have asked the government to reduce taxes on mobile money withdrawals by suggesting changes to the tax bills for the 2026/27 national budget.
Thank you for reading this post, don't forget to subscribe!The proposal was presented by the two telecom companies’ officials during an engagement with the Parliament’s Finance Committee, where they submitted views on the tax bills linked to funding the next financial year’s budget.
MTN and Airtel want the current 0.5% tax on mobile money withdrawals to be cut in half to 0.25%. They also requested the government to set a maximum charge (a cap) of Shs5,000 per transaction.
The MTN Uganda General Manager for Corporate Services, Dennis Kakonge, told the committee that the company is not asking to remove the tax completely but is asking for minimal charges.
He explained that a lower rate would still bring money to the government while also encouraging more people to use mobile money, making the tax better for everyone.
“We are not asking Parliament to remove the mobile money tax completely. A lower rate will still bring revenue to the government, and at the same time, it will encourage more people to use mobile money. This makes the tax better for everyone,” Dennis remarked.
The Airtel Uganda Managing Director, Soumendra Sahu, asked the government to remove the 10% import duty on smartphones costing less than Shs500,000, urging that cheaper phones would help more people join the digital economy.
He argued that more people using smartphones would increase data usage, and the taxes from that data would make up for the money lost from removing the import duty.
“Removing the 10% tax on cheap smartphones costing less than Shs500,000 means more Ugandans will be able to own phones and join the digital economy. When more people use smartphones, they will buy more data, and the taxes from that data will cover the money lost from removing the phone tax,” Soumendra stated.
The Otuke County MP, Hon. Paul Omara, said the current taxes have made withdrawal fees higher than those in banks, warning that this hurts financial inclusion by stopping people from using formal money services.
However, the Mbale Industrial Division MP, Hon. Karim Masaba, disagreed and said that applying the same 0.25% tax to both banks and mobile money could make things worse.
He warned that it might make transactions too expensive and push people to keep their money outside the banking system.
Meanwhile, the Chairperson of the Finance Committee, Hon. Amos Kakunda, requested to know why the company heads did not say anything about a proposed tax on mobile money agents.
He asked if their silence meant agreement, and said the committee will keep debating the proposals, noting that lawmakers must balance tax needs with financial inclusion and a cashless economy.
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