The Executive Directors Uganda Communications Commission (UCC) Godfrey Mutabazi has seconded a proposal by Uganda Revenue Authority (URA) to have the social media tax (OTT) charged directly on data contrary to charging separately directly from mobile money.
Early this week, the Commissioner General URA Doris Akol while appearing at Finance Parliamentary Committee said that correction of the social media tax was facing challenges because some social media users were evading it by using VPN
She proposed that instead, the tax should be charged directly on data to counter the tax invaders
Speaking on the same issue at an MTN event in Kampala yesterday, Mutabazi said that in his personal view, charging the tax directly on data will be much better for both the users and URA
“If the users are worried that data charges will be expensive once they put the OTT tax, they should not be worried because it will only be a slight percentage increase, just about 1% to 3% and will not even be noticeable. Having to pay the tax directly from your mobile money is unconvincing even for the users, I believe charging directly on data,” he said
Nearly two years since government introduced the OTT tax, its implementation has faced resistance from sections of the public.
Akol told the committee that revenue collection from OTT has suffered much evasion and thus there is need for amendment of the Excise Duty Act and have a policy shift to directly charge OTT on data other than from mobile money.
“We are proposing that parliament amends schedule 2 of the Excise Duty Act to possibly put excise duty on data. This will counteract the effect of OTT, making it a little bit efficient to collect tax on data instead of direct OTT on mobile money which is highly evaded and is not performing well,” Akol said.
The tax on social media was introduced by the executive and passed by parliament in 2018 amid widespread public outcry. The Shs200 daily tax on social media sites; Facebook, Twitter and Whatsapp, was introduced following a directive from President Museveni who argued that the tax would cut on the amount of time that Ugandans spend gossiping on social media, and enhance the URA revenue pool.