Users of WhatsApp, Facebook, Instagram, Snapchat etc will soon be taxed in Uganda for using these platforms according to Uganda’s Finance Minister. The Minister’s announcement came as a result of a letter sent to him by Uganda’s president, Yoweri Museveni dated 12 March. Museveni has been pressuring the country’s revenue Authority to find new tax sources hence that’s where this latest proposal stems from.
Of course, this has ignited a backlash from the public who are seeing this move as a way to bankroll the corrupt politicians.
According to the letter, the taxation will not be confined to social media only but to many Over-The-Top (OTT) media services like Google, Yahoo etc. An Over-The-Top media service is a service that provides a product over the Internet and bypasses traditional distribution channels.
Uganda is proposing to charge a 100shillings tax per day to internet users and the measure is expected to generate at least $108million per year from social media users according to the government.
“If we were to introduce a small fee of Uganda Sh100 per day from sim-cards that are used by these OTTs, that would generate about Sh400 billion additional revenue.”
The proposal has already been approved by the cabinet and will be included in the upcoming 2018-2019 budget.
Outrageous but Uganda may have a point though
Social media platforms like WhatsApp, Facebook etc produce services that are as good as services produced by DStv and yet DStv pays taxes for exporting these services into any country so why shouldn’t the abovementioned social media platforms not pay taxes.Uganda has obviously seen that it can’t make social media companies pay taxes so to address this it now wants to charge the tax directly to the users. Although Dstv is not an OTT in the sense of Google or Facebook but the idea that it exports a service makes it similar to them.