The Forum for Democratic Change (FDC) has stepped up pressure on the government to reduce the tax imposed on mobile money withdrawals, saying the levy is making access to personal funds more expensive and placing an unfair burden on ordinary citizens.FDC Vice Chairperson Robert Centenary said the government is effectively taxing money repeatedly as it moves through different stages of the economy. He argued that workers already pay income tax before receiving their salaries, yet additional charges arise when the same earnings are transferred, withdrawn and eventually spent.
At a media briefing in Kampala on Monday, Centenary said the current system includes a 0.5 percent excise duty on the amount withdrawn through mobile money, in addition to a 15 percent excise duty charged on the service fee. He warned that these costs can quickly become significant for people who rely on mobile money for routine financial transactions.The FDC said the tax burden becomes even heavier when withdrawn money is used to purchase goods and services that attract Value Added Tax. According to the party, the combined effect amounts to repeated taxation of income that has already been subjected to other forms of taxation.Centenary said low-income earners and small businesses are among those bearing the greatest impact because they frequently use mobile money to receive payments, send funds, purchase supplies and settle daily expenses. He maintained that increasing transaction costs could discourage businesses from using digital payment platforms.The opposition party also raised concerns about the livelihoods of mobile money agents.
It estimates that more than 150,000 agents, including large numbers of young people and women, could be losing income as customers reduce their use of mobile money or return to cash transactions to avoid additional charges.The FDC warned that the situation could have wider consequences for financial inclusion, particularly for farmers and households that depend on mobile money because they have limited access to conventional banking services. The party criticised the decision to maintain the 0.5 percent withdrawal levy for the 2026/27 financial year instead of reducing it to the previously proposed 0.25 percent.Centenary urged the government to reconsider the tax and avoid imposing excise duty on both the withdrawal amount and the transaction fee. He said telecommunications companies’ profits should carry a greater share of the tax burden, arguing that cheaper mobile money services would boost digital transactions, protect agents’ incomes and support small businesses across Uganda.
