The government is moving to scrap off Over-The-Top (OTT) tax imposed on social media for a 12 percent tax on Internet bundles.
Finance Minister Matia Kasaija tabled the proposal in Parliament under the Tax Amendment Bills which seeks to involve 7 new taxes effective July 1st.
According to the Uganda Revenue Authority (URA), the OTT tax has not been very rewarding in terms of revenue collected.
It also comes on the heels of a Market Performance Report issued by the Uganda Communications Commission (UCC) indicating that the majority of Ugandans are dodging to pay tax using VPNs.
UCC says subscribers are only using private virtual networks (VPN) or utilizing Wifi, which is not subjected to OTT tax.
Only 7.6m Internet subscribers out of the targeted 18.9m subscribers are paying the OTT
In the Bills that Speaker Rebecca Kadaga sent to the Parliamentary Committee on Finance, Planning, and Economic Development, the government did not indicate how much it intends to collect from the levy on Internet bundles.
Under the proposals, Internet bundles used for medical and education services will be exempted from the 12 percent levy.
Matia also wants parliament to approve the 7 new taxes including; Fish Amendment Bill, 2021; External Trade Amendment Bill, 2021; Income Tax Amendment Bill, 2021; Mining Amendment Bill, 2021; Stamp Duty Amendment Bill, 2021; and, Tax Appeals Tribunal Amendment Bill, 2021.
Other proposed taxes are; exports of processed gold, unprocessed minerals, wheat, leaf tobacco, fish maw, and milling by-products.
Others are Tax Procedures Code Amendment Bill, 2021; Tobacco Control Amendment Bill, 2021, Traffic and Road Safety Amendment Bill, 2021; and, Value Added Tax Amendment Bill, 2021.