You thought Social media tax and Mobile Money tax were a joke? Well get strapped because it just got real. The leaked letter in which the President proposed taxing social media usage caused a lot of debate on several platforms. The government’s “aggressive” plans for taxing social media usage were strongly criticised in a flurry of responses. Strongly worded criticisms were voiced by groups ranging from the ordinary social media users to Members of Parliament.
The President made this proposition after noticing the “unseriousness” in the way taxes are collected. He suggested that an excise duty should be slapped on Airtime, voice conversations and non-educational communications on Over The Top channels such as Facebook, Whatsapp and others.
After a heated debate, the Parliament has passed the Excise Duty (Amendment) Bill, 2018 with amendments. This approves the President’s proposed Social media tax and a 1% tax on Mobile Money transactions. The ripple effect of a tax on social media go far beyond hindering social media usage to some extent.
Social Media tax
A UGX 200 per day tax will be levied on every mobile phone subscriber in Uganda who uses social media platforms. The said platforms include Whatsapp, Twitter and Facebook. The Internet has greatly changed communication in Uganda. People have shifted conversations from traditional telephony to VoIP services. VOIP services are incorporated in applications like WhatsApp, Skype and Facebook. When NITA-U stated that Smartphones will soon be tax free in Uganda, we thought it was to further expand internet usage and power it gives to people. Then this tax?
How will it be implemented?
How this tax will be levied and enforced is not yet clear. Will the tax burden fall to the end user of the service or the ISP? There isn’t any laid out conclusive plan to monitor when social media platforms are accessed. Does this make it a for-everyone tax?
Mobile Money tax
Also, the Parliament approved Government’s proposal to slap 1% tax on the value of mobile money transactions. The Mobile money market is a ripe one and the government intends to collect UGX 115 billion from it alone. This was received by mixed feelings in the house. Monica Amoding, the Kumi Woman MP said, “The 1 percent tax on Mobile Money transactions would reduce financial inclusion in the country.” Jacob Oulanyah asked the house whether it is okay to have monetary transactions worth trillions going on within this country without being taxed.
