Take a shop owner in Owino. Four times a month she withdraws Shs500,000 from her wallet to pay suppliers who only accept cash. Each withdrawal costs her a Shs7,000 agent fee, Shs2,500 in excise duty on the amount, and another Shs1,050 in excise duty on the fee itself. That is Shs10,550 every time, Shs42,200 a month, and more than Shs500,000 a year. A full withdrawal’s worth of stock goes to fees and tax. She is an illustration, not an average. But she is not hard to find.
Between January and July 2026, Ugandans moved Shs263 trillion, roughly $71 billion, through mobile money in 5.8 billion transactions. There are 59.8 million registered accounts, though only 38 million were used in the past 90 days.
Bank of Uganda data reported by Uganda Business News shows first-half transaction value up 32.5 per cent to Shs224.8 trillion, while the number of transactions rose only 11.9 per cent. Ugandans are moving bigger amounts, not just moving money more often. Salaries, school fees, remittances and stock purchases all run through the phone. For millions of people, mobile money has replaced the bank.
Mobile money has never been bigger. For traders who still live on cash, getting money out of the wallet remains costly, and the government has decided the withdrawal tax stays.
Receiving money is usually free. The pain comes at the exit. Every cash withdrawal at an agent, ATM or bank counter carries a 0.5 per cent excise duty on the full amount. On top sit the provider’s fee, a 15 per cent duty on that fee, and a 10 per cent withholding tax on agent commissions.
For anyone whose supplier, landlord or boda rider wants notes, those charges come back with every withdrawal.
In April, MTN Uganda and Airtel Uganda asked Parliament’s Finance Committee to halve the withdrawal duty to 0.25 per cent and cap it at Shs5,000 per transaction. MTN’s Dennis Kakonge told MPs that Uganda taxes mobile money more heavily than richer economies with larger digital markets. The operators argued a lower rate would lift usage and could still raise up to Shs80 billion.
The Finance Ministry had floated a similar cut earlier in the year, then dropped it from the 2026/27 budget. The 0.5 per cent stays.
Here is what the cut would have meant. On a Shs500,000 withdrawal, the duty would have fallen from Shs2,500 to Shs1,250. On Shs4 million, the cap would have brought it down from Shs20,000 to Shs5,000. For the Owino trader, the saving would have been about Shs60,000 a year. Welcome, but small next to the agent fee, which no tax reform touches.
Growth figures cannot answer that. A booming total can hide a squeezed bottom. The Civil Society Budget Advocacy Group (CSBAG) says people who make small transactions are increasingly finding it easier to keep cash in their pockets.
Proving it would take data Uganda does not publish: what customers pay relative to what they move, which transactions they avoid, and where complaints cluster.
The Bank of Uganda could publish comparable figures on the real cost of each type of transaction. Operators could show the full charge, fees and taxes together, before a customer presses confirm. Wholesalers and suppliers who accept digital payment remove the need to cash out at all.
Any reform also has to keep agents in business. In places banks never reached, they are the only bridge between a wallet balance and cash in hand.
Uganda has built one of Africa’s busiest mobile money markets. The next test is whether ordinary users can afford to get their own money out. For a trader paying half a million shillings a year to reach her cash, Shs263 trillion is just a headline.
