By Kiyimba Bruno

Civil societies under the umbrella of Civil Society Budget Advocacy Group (CSBAG) have criticized the government for not preparing itself for the new OTT and mobile money taxes.

This was revealed in a press conference lead by CSBAG boss Julius Mukunda at their offices in Ntinda where Mukunda noted that the new OTT and mobile money taxes are things that government set when it was not ready for.

“This whole thing of the new tax system was something that the government was not prepared for. I don’t think this tax originated from any technical person. Its just simple mathematics of primary one that can tell you what product you can bring to the people.” Said Mukunda.

Mukunda added that there has been resistance from different mobile money users across the country requesting a reversal of this tax due to its effects.

He also noted that the government decision to change the tax from 1% to 0.5% on withdrawals and wait for parliament’s approval of the revision on is a total indicator of the unpreparedness of the government since it can not even explain the criteria to which these taxes are either imposed or reduced.

 Meanwhile civil societies proposed to government that it should extend this tax to banks by charging banking transactions including agency banking and ATM withdraws.

Whereas CSOs appreciate the minister’s proposal and efforts to raise revenue, they believe that reducing the tax to 0.5% is not good as it may be is still harmful to the vulnerable poor who have greatly adopted this digital financial service. Hence, they proposed that government looks more into indirect charges like charging transaction fees and increasing exercise tax from 15% to 20%, than imposing direct tax on the use of mobile money.