Government May Soon Tax Your Cash Withdrawals From Banks

Posted by: Eninu William in Finance February 11, 2021

The government through the ministry of finance is working out a plan to start taxing cash withdrawals from commercial banks, Newslexpoint.com has learned.

A letter dated February 9, 2021, by Patrick Ocailap, 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,” the letter reads in part.

The letter also says 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. Apparently, this raised the 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 data for the past three financial years.”

Mr. Patrick Ocailap asks that they send the data not later than tomorrow, Friday, February 12, 2021.

This plan, if brought to life will have Ugandans digging deeper into their pockets to pay yet another tax.

Previous taxes the government introduced

The government introduced numerous taxes in the past few years. A tax on social media is one of them, albeit the most infamous. This is with the aim of ensuring Uganda finances a bigger percentage of its budget.

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

To achieve this, the ministry of finance planned to have shs19.89 trillion come from direct taxes. The government authorized the Uganda Revenue Authority to impose these taxes. Shs1.5 trillion from non-tax revenues including fines and bank charges among others.

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