A operator that is in the race for the 4ª global license of Telecommunications in Angola, saw the daily transaction volumes of its mobile money shrink to about 50%.
Speaking backstage at the launch of MTN MoMoPay, a mobile payment solution system in Kampala over the weekend, Elsa Muzzolini, MTN's general manager of mobile money, has ensured that the 1% tax on mobile money, added by the Ugandan government, has affected business and is likely to have more impact.
She went on to say that, “before tax was introduced, we used to transfer large amounts daily. But now it has greatly reduced, adding, "This is really bad news for the company and for the economy as a whole ".
The tax slowed the flow of money through mobile money, especially in relation to large transactions. The 1% mobile money tax is currently under review in Parliament.
Civil society and various stakeholders advised the government to suspend this tax, even when the government indicated that the tax came to stay.
What local government has gained from this?
The Ugandan Tax Authority had initially directed telecommunications to charge an 1% tax on all mobile money transactions. However, this has been reversed and the tax, which is still at 1%, until Parliament provides a review, currently applies only to withdrawals.
Muzzolini also said that although they were the most affected, revenue for the government decreased from 50% to 30% due to reduced profits, since most people abandoned mobile money, with some opting for banks and physical movement of money.