Mobile money is widely seen as a powerful tool for enhancing financial inclusion and, potentially, improving the economic well-being of the poor. As the mobile money sector, and its turnover, have grown, certain governments have increasingly viewed mobile money transactions as a potentially convenient tax handle. The resulting tax measures are often controversial and draw sharp criticism from those who fear that they will undermine the growth of digital financial services. The case study of Uganda highlights an interesting example of this trend and demonstrates the importance of careful tax policy design.
Impact / Outcome
Several critical steps in the tax policymaking process were truncated or missed completely, undermining the process. Firstly, the policy process was not robust enough to withstand political pressures. The technical sphere of government succumbed to these pressures, rushing through an inappropriate measure without proper examination. Policy development, which usually takes several months, was compressed into about two weeks, undermining the ability of officials to gather evidence, analyse the proposal, and develop viable alternatives.
Funding sources
Public
Key Metrics
Enhance financial inclusion and, potentially, improve the economic well-being of the poor
Operating model
Fully publicYear published
01 January 2021