Uganda mobile money tax — the 0.5% withdrawal levy explained
Uganda charges 0.5% on the VALUE of every Mobile Money withdrawal — plus 15% VAT on the operator service fee. The tax hits ONLY withdrawals (cash-out at an agent, bank agent or ATM). Sending money stays exempt. The Treasury confirmed in April 2026 that the rate stays at 0.5% for 2026/27.
How the tax breaks down
Every withdrawal shows three lines on your MTN or Airtel SMS. Knowing which ones will not disappear — even on a different operator — helps you pick the right channel.
- Operator fee. Pulled from the MTN or Airtel schedule based on the amount band. The only component that varies between operators.
- URA tax of 0.5%. A national excise on the VALUE of the withdrawal. Identical at MTN, Airtel, Wave and at any licensed operator. Remitted to URA monthly.
- 15% VAT on the operator fee. A separate excise duty, calculated only on the 'operator fee' line — not on the withdrawal amount, and not on the URA tax.
To withdraw UGX 100,000 at an MTN agent: the operator fee is UGX 1,925, the URA tax is UGX 500, and the VAT is UGX 289 — total cost UGX 2,714. On UGX 100,000 withdrawn, that is a 2.71% effective rate.
Verified worked examples
Here is the exact total cost for five common withdrawal amounts, computed off the MTN MoMo Uganda schedule published on mtn.co.ug. The URA tax and VAT are calculated to the shilling.
| Withdraw | MTN fee | URA tax 0.5% | VAT 15% | Total |
|---|---|---|---|---|
| UGX 10,000 | UGX 700 | UGX 50 | UGX 105 | UGX 855 |
| UGX 50,000 | UGX 1,500 | UGX 250 | UGX 225 | UGX 1,975 |
| UGX 100,000 | UGX 1,925 | UGX 500 | UGX 289 | UGX 2,714 |
| UGX 500,000 | UGX 7,000 | UGX 2,500 | UGX 1,050 | UGX 10,550 |
| UGX 1,000,000 | UGX 12,500 | UGX 5,000 | UGX 1,875 | UGX 19,375 |
Note: the 0.5% URA tax is the component that dominates on large amounts. On UGX 1,000,000 the MTN fee (12,500) is only 64% of the total cost — the remaining 36% is the tax and VAT.
Send vs withdraw — the distinction that matters
The 0.5% tax is an excise on WITHDRAWAL, not on movement of money in general. That changes the daily playbook: rent paid via MoMo Pay (to a landlord or property manager registered as a merchant) is not taxed; the same rent paid by withdrawing cash and handing over bills is. Over twelve months, the difference for a household that pays everything via wallet runs into tens of thousands of shillings.
Three operations that completely ESCAPE the tax: sending to another MoMo number (P2P, *165*1#), paying a registered merchant (MoMo Pay, *165*3#), and paying a URA bill or utility company straight from the wallet. Three operations that TRIGGER the tax: withdrawing at an agent, withdrawing at a partner ATM, or withdrawing at a bank agent.
Sources and 2026/27 status
The tax is written into Uganda's Excise Duty Act. The rate was introduced in 2018 at 1% on withdrawals, reduced to 0.5% in July 2018 after public mobilisation, and has not been touched since. The most recent proposal — to reduce to 0.25% and extend the base to ATMs at all banks (not only MoMo partners) — was tabled in late 2025 under the 'Revenue Enhancement and Compliance Measures 2026/27', then dropped in April 2026 by the Permanent Secretary to the Treasury.
What that means in practice: 0.5% remains the only applicable rate for fiscal year 2026/27. Any future legislative update will be reflected here within 7 days. Always confirm the final fee in your MTN or Airtel SMS.
To calculate the exact cost of a withdrawal at another amount, see our dedicated pages: withdraw UGX 50,000 · withdraw UGX 500,000 · withdraw UGX 1M · all withdrawal bands.