The organizations say taxing cash withdraws will affect the development of the country’s economy and its bound to increase a tax burden through multiple taxation.
The executive director for the Southern and Eastern Africa trade information Jane Nalunga and Agnes Kirabo the executive director Food rights alliance say that government should look for other avenues were they can get the revenue rather than introducing such retrogressive tax strategies.
The organizations which includes civil society budget advocacy, tax Justice Alliance, Food rights alliance and Oxfam say, the government proposal to introduce such a tax will not achieve the intended objectives of promoting E- commerce, increase on the tax base among others.
Government is proposing to levy a 0.5% excise duty on cash withdraws including on the counter, agency banking and ATM from commercial banks starting with the financial year 2021/2022.
The tax advocates now recommend that, government should venture into avenges that promote financial inclusion in the country and generate revenue at the same time while ensuring fairness, equity and inclusiveness.
However, Bank operators are strongly questioning the motive by govt to introduce a 0.5% tax on every bank withdrawal from their customers.
The executive director Stanbic bank Uganda Emma Mugisha, since banks pay taxes on transaction there is no need for their customers to be charged another tax as they withdraw their monies which sometimes has already been taxed before being banked.
Just like other bankers, Mugisha is now waiting to see if govt fully implements the new taxes or drops the plans which to her might discourage many of their clients. Statistics reveal that only 2 million Ugandans out of the 45 million are banked.