Social Media and Mobile Money were subjected to taxes in the wake of government increasing its revenue sources for this current financial year. Social Media alone was projected to collect up to UGX 8.3B in July alone but has had a shortfall of UGX 3.9B as telecom companies have so far managed to collect only UGX 4.4B, mainly because users are circumventing the system using VPNs, according to the Daily Monitor.
To date, accessing some over the top services (OTT), one is required to pay a daily Social Media Tax of UGX 200/= payable via Mobile Money, UGX 6000 per month and UGX 73,000 per year. However, the statistic so far indicate only UGX 4.4B collected as Social media Tax of the projected UGX 8.3B. Government’s yearly target is to collect UGX 100B maybe UGX 52.8B away from realization if this trend continues or if at all these collections don’t even come through or continue to fall.
In the same report by the Daily Monitor about VPNs accounting for this significant loss in government’s collections, UCC admitted that was as a result of recurring creations of multiples access points that are hard to block by authorities.
It has been a challenge because of the creation of multiple VPN [access points] and the difference in jurisdiction – Abdusalam Waiswa (Director of legal affairs, UCC)
In the event that gave birth to Mobile Money and OTT tax, many digital enthusiasts ranted to government in protest of the two new taxes. The backlash caused government to at least half charges directed towards Mobile Money be subjected to only withdraws. The proposal to reverse this is still under parliamentary review.
