More Africa NewsUganda: social media tax generated only 17.4% of the annual sum expected in 2018

July 17, 2019by myles

The tax on social networks, introduced in July 2018 in the Republic of Uganda, is currently failing in the country. The financial forecasts developed around this tax are struggling to come true because users of Facebook, WhatsApp, Twitter, Instagram and others still refuse to pay.

According to Doris Akol, the Commissioner General of the Uganda Revenue Authority (URA), it is those who can afford to pay for access to social networks that most refuse to pay tax on the grounds that The measure of the government is an extravagance that will only result in a new waste of resources.

According to Doris Akol, the tax on Over-The-Top (OTT) applications “  was worth 284 billion shillings (US $ 77,519,484), but we collected only 49.5 billion shillings (US $ 13,511,318) )  , Or 17.4% of the targeted total. The current poor performance of this levy on social networks, the head of the URA explained that it also results from the use of Wi-Fi in the Internet covered areas and especially from the continued use of virtual private networks (VPN) to avoid paying this excise.

However, if the tax collected on social networks remains low, the tax on Mobile Money has gone beyond the forecasts. It must be said that there are no avoidance solutions like the VPN in this segment of the market. The tax generated an income of 157.2 billion shillings (US $ 42,908,672), an increase of 42 percent, well above the 115 billion shillings (US $ 31,389,932) expected.

Source: Agence Ecofin

© Copyright Extensia Ltd