{"id":70477,"date":"2024-04-05T06:39:51","date_gmt":"2024-04-05T06:39:51","guid":{"rendered":"https:\/\/www.africa-press.net\/uganda\/?p=70477"},"modified":"2024-04-05T06:10:13","modified_gmt":"2024-04-05T06:10:13","slug":"govt-proposes-0-5-tax-on-agent-banking-transactions","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/uganda\/all-news\/govt-proposes-0-5-tax-on-agent-banking-transactions","title":{"rendered":"Govt proposes 0.5% tax on agent banking transactions"},"content":{"rendered":"

Africa-Press – Uganda. <\/strong><\/span>Government has proposed a 0.5 percent levy on all withdrawals conducted through agent banking.<\/b><\/p>\n

In details contained in the Excise Duty (Amendment) Bill 2024, government is proposing that effective July 2024, if the Bill is passed, all withdrawals of cash provided through a payment system or agent banking but does not include withdrawal services provided by a financial institution or a microfinance deposit-taking institution will be subjected to 0.5 percent excise duty.<\/p>\n

The proposed will tax will be an addition to the current arrangement in which financial institutions have been charging Shs2,500 on a transaction conducted through agent banking, in addition to a 15 percent levy against the value of Shs2,500 bank charge surcharged against a customer.<\/p>\n

It is the first time government is proposing to introduce a direct tax charge on agent banking transactions since it was launched in Uganda in 2017.<\/p>\n

The same levy of 0.5 percent is charged on mobile money transactions. It was introduced in 2018.<\/p>\n

Ms Juliet Nagginda, the PwC tax manager, yesterday said the new tax is expected to impact government\u2019s agenda of financial inclusion, which has heavily relied on agent banking to offer safe and affordable financial services, especially in rural areas where banks do not have branches.<\/p>\n

\u201cThe 0.5 percent excise duty will discourage this. Also this is a tax being imposed where there is no income [or] value addition since it\u2019s just a tax on money,\u201d she said.<\/p>\n

The tax is among a raft of new proposals in which government is seeking to improve domestic revenue mobilisation with a target of growing the tax-to-gross domestic product ratio by 0.5 percent annually.<\/p>\n

The target feeds into government\u2019s agenda to grow the tax-to-gross domestic product ratio from the current 14 percent to between 16 and 18 percent.<\/p>\n

This is the first time government has proposed new tax measures in over three financial years as it sought to create ample space for economic recovery from the impact of Covid-19 and the Russia-Ukraine conflict.<\/p>\n

The proposed taxes are, however, expected to increase the cost of services, especially since they feed into consumer prices. Data indicates that at least Shs6.8 trillion is transacted through agent banking per month across a network of more than 11,000 agents.<\/p>\n

Yesterday, Mr Wilbrod Owor, the executive director of Uganda Bankers Association, which operates a shared agent banking platform known as Agent Banking Company, said they were studying the proposal for a way forward.<\/p>\n

\u201cOur tax team is reviewing all the [tax] proposals that government has introduced. We are going to engage all the relevant stakeholders – Ministry of Finance and respective Parliamentary committees,\u201d he said, noting that the review will inform their next move, which will mainly engage relevant authorities for a win-win outcome.<\/p>\n

For More News And Analysis About Uganda<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – Uganda. Government has proposed a 0.5 percent levy on all withdrawals conducted through agent banking. In details contained in the Excise Duty (Amendment) Bill 2024, government is proposing that effective July 2024, if the Bill is passed, all withdrawals of cash provided through a payment system or agent banking but does not include […]<\/p>\n","protected":false},"author":84,"featured_media":70476,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[233,240,234],"class_list":["post-70477","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-uganda","tag-uganda"],"yoast_head":"\nGovt proposes 0.5% tax on agent banking transactions - Uganda<\/title>\n<meta name=\"description\" content=\"Government has proposed a 0.5 percent levy on all withdrawals conducted through agent banking. 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