• February 11, 2021
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Ministry Of Finance Moves To Tax Cash Withdrawals From Commercial Banks

Ministry Of Finance Moves To Tax Cash Withdrawals From Commercial Banks

In a letter dated February 9, 2021, Patrick Ocailip, the deputy secretary to the treasury in the Ministry of Finance has written to the Governor, Bank of Uganda seeking an opinion and data not later than Friday, February, 12, 2021 on the matter.

“Following our budget consultative meeting held on February 5th, 2021, at this ministry attended by officials from Uganda Communications Commission, Ugandan Revenue Authority, telecom operators and Bank of Uganda, it was proposed that we explore taxation of cash withdrawals, from commercial banks,” reads part of the letter.

The Ministry of Finance noted that whereas withdrawals on Mobile Money are taxed a 0.5% excise duty, bank withdrawals at the ATM, counter and agency banking in commercial banks are not subjected to the same, raising government’s concern.

“We, therefore, wish to seek your opinion on the proposal and also request you to avail us with data on all categories of withdrawals for our further review and determination. We require this date for the past three financial years.”

The deputy secretary to the Treasury in the Ministry of Finance further added that the data should be sent not later than tomorrow, Friday, February 12, 2021.

Government has in the past few years introduced a number of new taxes with the move being aimed at ensuring that Uganda finances a bigger percentage of its budget.

For example, in order to support the budget for the current 2020/21 financial year, government proposed to increase taxes to a tune of shs.2.7 trillion .

To achieve this shs19.89 trillion were planned to come from direct taxes as imposed by the Uganda Revenue Authority, shs1.5 trillion from non-tax revenues including fines and bank charges among others.

President Museveni has on several occasions emphasized the need for Uganda to finance her own budget to slowly by slowly move away from depending on donor funding and borrowing from foreigners.

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