Social media users give gov’t Shs 2bn in two weeks

Acting on a financial report from the Bank of Uganda, the executive on Monday resolved to maintain the social media tax despite the growing agitation over that tax.

According to sources within cabinet, the ministers were on Monday told that among the newly introduced taxes, social media tax is one of the highly paid taxes.

The tax was implemented on July 1 and requires social media users to pay Shs 200 everyday.

The Minister for Information and ICT Frank Tumwebaze confirmed the development on Tuesday at the Uganda Media Centre in Kampala during the weekly cabinet briefing.

“The implementation of Excise Duty on OTT [Over the top services] at Shs 200 per day of access will continue, and further improvements to the payment options will be discussed with the Telecom Companies,” said Tumwebaze.

This implies that the tax will not be part of the amendments to the Act that government is expected to introduce to Parliament on Thursday.

According to Tumwebaze, cabinet moved to maintain the OTT tax but reduce the 1% tax payable on the value of Mobile Money transactions.

Cabinet directed the Minister of Finance, Planning and Economic Development in Consultation with the Attorney General to prepare an Excise Duty Amendment Bill, 2018.

The bill expected to be presented to parliament by Thursday 19th July reduces the 1% tax to 0.5%.

State Minister for Finance in charge of Planning, David Bahati said government and telecommunication companies shall work to create more payment models to bring convenience to the users.

Currently payments are made either daily, weekly or monthly using Mobile Money for majority of the telecommunication networks.

“You can pay quarterly, you can pay annually, so all those options are going to be looked at such that it is more convenient for people to pay. Also if you have your bundles you have your airtime, all these options are being considered by the telecom, you don’t have to go to the shop to get this access,” said Bahati

Since July 1, Bahati said, government has collected Shs 2bn in tax from social media users while Shs 5bn has so far been collected from mobile money transactions.

Bahati said, with over 10 million social media users, government shall collect Shs 284 bn this financial year while mobile money withdrawals will earn government Shs118bn.