Uganda's state minister for finance made the announcement on Thursday in Parliament.

David Bahati said: "The president assented to the bill within the period as indicated in the Constitution. The law will be gazetted Friday. And the effectiveness of the law will start on the same day."

At the beginning of the 2018/19 financial year, a 1% tax on all mobile money transactions came into effect to boost revenue generation.

Also Read: Uganda to block VPN access after failing to hit social media tax revenue target

In October, the Ugandan parliament revised the tax reducing it to 0.5%. The move was a result of protests and public outcry which saw a significant decline in mobile money usage countrywide.

The new tax hadn't come into effect despite President Kaguta Museveni assenting to the Excise Duty (Amendment) (No.2) Bill, 2018.

Mobile Money users were still experiencing a tax deduction of 1% on transactions.

Shortfall

Uganda Revenue Authority (URA) announced a shortfall on mobile money tax revenue in the first quarter of implementation ending September.

The tax body collected UGX103bn of the targeted UGX151.5bn.

There is also a projection of a major reduction of revenue collected from mobile money tax in the 2nd quarter due to the review of the tax percentage.