FSME’s executive director, John Walugembe (right) presenting during the Parliamentary Committee on Finance, Planning and Economic Development on Tuesday this week.Small and medium enterprises are pushing for significant tax reforms in the digital service sector, saying the current taxes on mobile digital transactions and tools are costly and restrain financial inclusion.While appearing before Parliament of Uganda’s Committee of Finance, Planning and Economic Development on Tuesday, SMEs represented by their umbrella body, the Federation of Small and Medium-sized Enterprises (FSME) called for reductions of excise duty on mobile money and entry-level smartphones.This comes during the public comment phase on the proposed Tax (Amendment) Bills for the financial year 2026/27.Transition to cashlessThe executive director of FSME, John Walugembe said a fairer tax framework will unlock broader participation in the formal economy and accelerate Uganda’s transition to a cashless society.“Under the Excise Duty Act, Cap 336, FSME proposes amendments to the excise duty on mobile money cash withdrawals, reducing the excise duty rate on mobile money cash withdrawal transactions from 0.5% to 0.25% of the transaction value, with a maximum cap of Ushs 5,000 per transaction,” he said.On the other hand, under the External Trade Act and the Value Added Tax Act, the federation proposed the removal of import duty on entry-level smartphones (CIF value up to UGX 500,000) by applying a 0% rate under HS Code 8517.13.00 and zero-rating VAT on these devices.Walugembe said reducing the excise duty on mobile money cash withdrawals will ease the burden on low income earners and MSMEs who rely on digital payments for daily transactions.“As more Ugandans transact using Mobile Money, the number of MM agents will increase, creating much-needed jobs,” he told legislators on the committee.Smartphone as an opportunityIn the same breath, Walugembe added that “as more users access entry-level smartphones and come online, digital transactions will increase, boosting government revenue through various channels, including mobile money levies, excise duties on telecom services, PAYE, and corporate tax from digitally enabled businesses. The ecosystem for smartphones will also be catalyzed to grow.”Members on the committee, which was presided over by the vice chairperson Moses Aleper (MP of Chekwii County), thanked the federation for the proposals and promised to further study them, given the importance of digital inclusion in achieving Uganda’s Vision 2040. The post SMEs Want Tax Reforms To Partake Of Digital Economy Opportunities appeared first on Business Focus.