Gov’t plans to raise capital requirements for forex bureaus, money transfer firms

By Francis Lubega

23^rd June 2023

The government is proposing to increase capital requirements for Foreign Money Transfer Companies to 200 million shillings, equivalent to 10,000 currency points from 50 million shillings before.

They also are suggesting increasing the capital requirement for Foreign Exchange bureaus to 50 million shillings which is equivalent to 2,500 currency points from 20 million shillings before.

The proposals are embedded in the new tax regime that the Government seeks to introduce in the new tax amendments in the Foreign Exchange Bill 2023 according to the Finance Ministry.

The Ministry of Finance, Planning and Economic Development is also seeking to increase the minimum security deposit of 2,500 currency points, equivalent to Sh50m, up from the Sh20m in the Principal Act by the Foreign exchange bureaus to the central bank to conduct foreign exchange business in the country.

Speaking to the Parliamentary Finance Committee, the State Minister for Finance, Henry Musasizi said the current law is out-dated according to the new challenges and dynamics compared to those at the time when it was enacted in 2004.

Musasizi further justified the amendments in the Foreign Exchange Bill 2023 saying it’s aimed at tightening loopholes in tax collections and widening the tax base.

Now, the Committee Chaired by Rwampara County MP, Amos Kankunda is scheduled to meet with the Uganda Bankers Association next week and other stakeholders before filling the report on the bill.

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