Mtn Uganda announced new mobile money rates starting July 2nd, after the government announced a budget that levied 10% Value Added Tax on mobile money transactions starting 1st July. Definately the 10% levy on all transactions will be paid by the user hence increments in the the recent rates that were launched on 9th May. So Mtn Uganda users are going to pay more than what they have been paying.However unlike previous times, MTN Uganda might not bare the blame entirely since they have to pay this tax.
This is definately going to have an impact on those who rely on mobile money as a major form of money transactions however the service still seems convient and is a “backbone” to many businesses in uganda and has left many complaining.
In a press release by mtn says its active consumer base for mobile money has grown over 50% in the past year. The question is will such tarrif increments reduce the the consumer base? The answer could be yes or no, as some businesses are deeply rooted into mobile money for example mobile money agents, traders and many more. Mobile money still remains a convient way to send money and might retain its users.
Below is a press release from
“MTN Mobile Money touches the lives of many Ugandans on a daily basis and therefore there is the need to continuously invest in infrastructure to ensure improved service standards and reliability.
MTN Uganda’s Mobile Money active customer base has recorded significant growth by more than 50% during the last 12 months. The new Mobile Money rates will have slight increase on transaction fees, as example the convenience of sending UGX 4 million to another Mobile Money registered subscriber will cost UGX 2,200.
As Uganda’s leading tax payer MTN Uganda has an obligation to support the National development agenda by assisting in tax collection as prescribed by law.
“Although we feel the tax has been applied at a very early development stage of the Mobile Money product, MTN is committed to continued investment and growth of the service in Uganda,” Katamba added.
The national budget aims to widen the tax base, and one of the ways in which Government reaches new tax payers is via consumption taxes on various goods and services.
“We evaluated the impact of this new tax with all stakeholders and we saw the need to adjust our rates slightly in order for us to support this tax increment,” he concluded.
A screenshot of the mtn website showing the new rates