Minister reveals how Uganda will tax social media users

Thursday April 12 2018

Social media apps. AFP

Social media apps. Uganda plans to levy $0.03 tax daily on each SIM card connected to the internet. PHOTO | AFP 

By DAILY MONITOR
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The Ugandan government proposes a daily tax of Ush100 ($0.03) on all social media users in the country.

Addressing journalists at the Uganda Media Centre in Parliament on Thursday, the State Minister for Planning, David Bahati, said the fee will be charged everyday on each SIM card that connects to the internet for social media.

President Yoweri Museveni recently revealed that the government was planning to introduce taxes on social media platforms such as WhatsApp, Facebook, Twitter, Skype and Viber, claiming that people use these platforms mainly for lugambo (gossip).

He however received backlash from social media users, including human rights activists and opposition leaders, who said the new tax proposals were “diversionary, deceptive, injurious to individual freedoms and burdensome”.

Mobile money levy

The government has also introduced a 1 per cent tax on mobile money transactions. The fee will be charged on all withdrawals and deposits.

According to Mr Bahati, these tax measures are aimed at growing domestic budget financing.

He said the economy grew at 6 per cent this financial year as opposed to 5.5 per cent as had earlier been projected.

He attributed the significant growth to agriculture, services and industry sectors.

The government will also tax Ush100 ($0.03) for every litre of fuel for road maintenance, and 30 per cent income tax of Savings and Credit Cooperative Organisation (Sacco’s) net profit.

“If Saccos charge interest on members or people they lend to, and out of that they make profit, then they [should] pay 30 per cent income tax on the net profit," Mr Moses Ogwalpus, the acting commissioner tax policy at Ministry of Finance, said.

Mr Bahati said the tax proposals will take effect on July 1 if approved by parliament.