Uganda courts controversy over proposed mobile tax

Those who use mobile devices to access social media and OTT services will be required to pay a daily fee of 100 Ugandan shillings (US$0.0271) – that is if a proposed new tax regulation is approved by the country’s parliament and becomes law.

President Yoweri Museveni said the new tax would generate an additional 400 billion shillings (over US$108 million) for the state and while the government denied it was an attempt to control social media, it did say the funds would be used to deal with “government-targeted social media gossips”.

“This new tax will not only increase the tax revenues of the state, but also fight the gossip that harms the image of the country,” the president said.

The country’s Minister of Finance, Matia Kasaija, is tasked with introducing the new tax. He said the amount of tax to be levied will be calculated according to the number of minutes spent by Ugandans on social networks and OTT apps.

Several Members of Parliament led by Nandala Mafabi announced they would block the proposed tax claiming it would deepen the tax base instead of widening it. In place of a new tax, MPs on the ICT and the Budget Committees of Parliament advised the president to focus on the fight against corruption and other forms of financial indiscipline in government.

Telecommunication firms said the move would effectively introduce multiple taxation since operators and subscribers are already paying taxes on airtime, calls and data. They added that it would add to the tax burden on subscribers and this could be dangerous for the sector.

MTN Uganda’s General Manager for corporate service, Anthony Katamba, said, “The data you buy gives you internet. So taxing social media is taxing content.”

National Information Technology Authority Uganda’s figures showed mobile penetration in Uganda is about 71% with a total of 24.8 million Ugandans having accessing to mobile phones while only 32% have access to the internet.

Source: IT Web Africa