If you get bored easily, then you are most likely super bored with all the Social Media buzz that spread like a wave across the globe. Each day, there is something that happens in relation to social media tax. Whether it’s the defiant Ugandans gearing to fight against the infamous tax, or supporters of the tax justifying government’s move to impose a levy on OTT services. Social Media Tax continues to shake up internet conversations, and offline talk too.
On Thursday 19 July, Uganda Communications Commission Executive Director Godfrey Mutabazi took to his Twitter to justify the move to tax OTT Services. This wasn’t the first time Mr. Mutabazi tried to inform Ugandans of the importance of this tax. He is among the long list of proposers. The list ranges from Ministers like Hon. Frank Tumwebaze to musicians like Bebe Cool.
OTTs will kill Traditional Voice
Mr. Mutabazi tasked Ugandans to think about the present and future effects of OTTs on the evolving communications sector. He pointed out that voice calls from telecom provider are on a decline. “As OTTs perfect their technology, it will become a natural choice for everyone to make call using OTTs.” he added.
He mentioned that data is driving video communications and online broadcasting. Consequently, voice as a service is shifting to Voice over IP (VoIP), the next big thing. Therefore, taxation regimes that focus on voice communication as a service have to change and focus on data services and OTTs.
“As everyone embraces OTTs, all revenue streams will end up in Silicon Valley. OTT companies are generating huge revenue streams from advertising based on user numbers.” The UCC ED asked Ugandans how the government can expand the tax base when revenues are shifting to OTT providers.
The UCC boss reminded Ugandans that Uganda has not yet gained the critical mass to attract attention of OTT companies. Consequently, the government doesn’t tax OTT companies locally taxed. “Does that mean we lose out entirely? We pay taxes on beer, whisky, fuel and cigarettes. Is it impossible on OTT services?” he wondered.
He advised government to be mindful and long-sighted or else the revenues from traditional telecommunication providers would disappear. “They will disappear in the near future. It makes sense for countries like ours to look at the usage and consumption moving forward.” he said.
Where do local telecoms stand amidst all this Social Media Tax talk?
Mr. Mutabazi said that they are working on increasing access to the internet through the National Backbone Infrastructure. The NBI will reduce cost of access to encourage consumption. Consequently, traditional telecoms will continue surviving on incomes made on data because of increased data consumption.
“Support OTT TAX. It is a good tax and the government is [just] far-sighted to the realities of technology evolution. [The government does not] limit anyone to access and usage of the internet where infrastructure allows. Otherwise, blocking OTTs like in some Middle East jurisdictions is inconceivable”
