New internet tax for Ugandans is set to be introduced on Thursday after the infamous “social media tax” – an over-the-top (OTT) services daily tax that was put into effect in 2018 failed.
Uganda is set to start paying a 12% excise duty on mobile data on Thursday after the infamous “social media tax” – an over-the-top (OTT) services daily tax introduced in 2018 failed.
According to BBC, the new excise duty will not be charged on mobile data purchased for provision of medical and education services, but it remains unclear how the distinction will be made.
Since 2018, subscribers have been required to pay a daily tax of 200 shillings ($0.055) to use any one of more than 50 OTT mobile communication apps. These include social media services like Facebook, Twitter, and instant messaging and voice communication apps like WhatsApp, which are hugely popular in the country, reports indicate.
The government said the tax was intended to raise revenues and curb online gossip.
But according to Quartz Africa, the controversial OTT services tax was bound to fail, “given the widespread bi-partisan opposition it has elicited since being instituted”.
Millions of Ugandans abandoned social media platforms when OTT services tax was introduced.
In the three months following the introduction of the levy, the number of internet subscriptions to such services fell by more than 2.5 million, The Guardian reported.
Critics, at the time, described the tax as an attempt to restrict free speech, and warned of the damaging impact on the economy, the report said.
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Compiled by Betha Madhomu
