By Najib Mulema

Small holder farmers have blamed the government for introducing mobile money tax, saying it is the main reason why they are shunning away from agricultural value chain digitization.

Dick Nuwamanya Kamuganga, president of Uganda National Farmers’ Federation (UNFFE) said the introduction of the tax has forced some farmers to run away from the mobile banking.

“The federation has 8.9 million small holder farmers and with this number, we become the largest source of income and livelihood as well as biggest taxpayers through paying mobile money taxes,” he said on Tuesday in Kampala.

This was during a breakfast meeting where UN Capital Development Fund (UNCDF) in partnership with FSD Uganda and DFID was dissecting a report concerning its funded projects aimed at digitising agriculture.

Ali Balunywa, Airtel Sales and Distribution Director concurred with Kamuganga saying that the mobile money tax has negatively affected all service providers and a good number of farmers have since desisted from using their services.

He called upon government to scrap the tax, which, he said, is pushing many people out of business and in this case the agriculture sector players.

Meanwhile, Robert Natamba, a member of Bukanga Dairy Cooperative said digitization of agricultural value chain is the only way to go since it improves efficiency when it comes to cash management.

“Before we embraced digitization, we used to carry big bags of money from city banks down to rural areas and on top of that we used to stay with millions of cash in our offices for weeks which put our lives at risk, but with mobile banking we no longer fear for our lives, “said Mr. Natamba.

However, he stressed out some challenges faced while using the digital forms. He said the high charges on withdraws are a total turnoff and sometimes signatories forget passwords and usernames which factor makes money transactions disrupted.

For the past four years, UNCDF has been stimulating private sector engagement in rural areas of Uganda through digital bulk payment projects across five agricultural value chains: coffee, dairy, maize, seed oil and tea.