BBA - January 4, 2019 - 0 comments

Dorothy Bishagenda

The concept of mobile money started out as a solution to enable one man in Kenya send money to his ailing mother in a remote village. This made monetary transactions more convenient and has become very profitable over the years.
The financial year 2018/2019 saw the Government of Uganda pass a 1% levy, now said to be 0.5% excise duty on all mobile money transactions which is reflected in the Excise Duty (Amendment) Act 2018. Initially, the public thought that the excise duty was to be levied on mobile money deposits as well as other mobile money transactions. However, the Uganda Revenue Authority on 4th July 2018 released a statement to the effect that no tax should be charged on deposits.

This begs the question what happens with regards to the 1% tax that has paid on deposits since this law took effect. Is there a possibility of a tax refund? According to Section 12(1) of the Excise Duty Act, a person liable to pay excise duty may apply to the Commissioner for a refund of any excise duty paid in error or in excess of the excise duty assessed or due. Furthermore, Section 12 (5) of the Excise Duty Act provides that where the Commissioner is required to refund an amount of excise duty to a person under this Act, the Commissioner shall pay simple interest on the amount of the refund at the rate of two per cent per month commencing thirty days after the date the application for the refund and ending on the last day on which a refund is made.

The imposition of excise duty on mobile money deposits was an error and therefore every person who was charged this tax is entitled to a refund with interest thereon. The procedure for applying for this refund is by writing a formal letter to the Uganda Revenue Authority which should immediately effect the refund to avoid accumulation of interest.

It should be noted that with regards to refunds the commissioner shall, within thirty days of making a decision on a refund application, serve on the person applying for the refund, a notice in writing of the decision. If the aggrieved party is dissatisfied, he or she may challenge the decision under the objection and appeal procedure in the Excise Duty Tax.

Although individuals may be entitled to very minimal monetary refunds, the Uganda Revenue in conjunction with the Uganda Communication Commission which should have remitted it to URA should refund this as every individual in Uganda has a right to his or her property as provided for by Article 26 (1) of the Constitution.

The writer is an Associate partner in Birungyi,Barata And Associates law firm.

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