KAMPALA, Uganda – Small business leaders are calling on Parliament to overhaul taxes on digital transactions and smartphones, arguing that current levies stifle financial inclusion and the growth of the digital economy.
The Federation of Small and Medium-sized Enterprises presented its proposals Tuesday to the Committee of Finance, Planning and Economic Development as lawmakers review tax amendment bills for the 2026/27 fiscal year.
The federation is pushing for a 50 percent reduction in excise duty on mobile money withdrawals, moving the rate from 0.5 percent to 0.25 percent. The group also recommended capping the tax at 5,000 Ugandan shillings per transaction.
Executive Director John Walugembe told legislators that easing the tax burden on mobile money would specifically benefit low-income earners and small businesses that depend on digital payments for daily operations. He noted that a more affordable system would likely increase the number of mobile money agents, creating new jobs across the country.
Beyond transaction fees, the federation is advocating for the removal of import duties and value-added tax on entry-level smartphones with a value up to 500,000 Ugandan shillings.
Walugembe said that making smartphones more accessible would bring more Ugandans online, ultimately boosting government revenue through increased telecom service duties and taxes from digitally enabled businesses.
He described a fairer tax framework as a necessity for Uganda’s transition to a cashless society.
Committee Vice Chairperson Moses Aleper said the panel would study the proposals further, acknowledging the role of digital inclusion in the nation’s long-term development goals.
