Why government insists on taxing social media

Government on Thursday tabled a Bill to amend the Excise Duty (Amendment) Act 2018 which introduced taxes on mobile money and social media platforms.

Finance, Planning and Economic Development minister Matia Kasaija tabled the Bill that seeks to limit the taxable mobile money transactions to withdrawal.

“When they said you pay 1% on putting money on your mobile phone that is like telling somebody who is going to the bank to deposit money asking for taxing, I think the principle was wrong,” Kasaija said.

The amendment was tabled a day after President Yoweri Museveni met NRM MPs to explain to them the changes in the tax.

During the NRM parliamentary caucus meeting at State House Entebbe, Museveni told the MPs that the 0.5% tax on mobile money withdrawals will earn government Shs 118bn.

Kasaija later told journalists outside Parliament that government had insisted on taxing social media users because many are using the social media for rumour mongering and abusing the country’s leadership.

“If you have money to do that kind of chatting, we said, then pay, that is why we have said that things like education and research, the tax will not apply,” Kasaija said.

Government Chief Whip Ruth Nankabirwa in a separate interview said the Shs 200 levied from social media users per day was retained because it was considered to be too little.

“We scrutinised the law and realized that the Shs 200 per day isn’t too much money; some people have been misusing these facilities, you communicate anyhow, you don’t use it for business,” Nankabirwa told journalists.


Nankabirwa also revealed that Museveni had told the NRM MPs that he had procured a machine that will be used to detect those who use social media for research and educational purposes so that they can be exempted from social media tax.

“We have technology that will be used to detect whether you are doing educational work, research or coursework. What you need to know, when new technology comes up, other people also come up with new technology to negate (the existing) one,” Nankabirwa said.

She however could not explain how the machine would work but insisted that Museveni had told them that he had acquired it.