The Over the Top Tax of 200 Shillings a day was introduced in 2018 amid protests from the public and civil society, who argued that it was a violation of the right to information and would limit the growth of IT-based communication. The tax mainly targeted social media users who were accessing it through their mobile phones.
The Ministry of Finance, Planning and Economic Development says
one of the main reasons as to why the government introduced a 12 per cent Excise Duty
on internet use was to trap Ugandans who were evading OTT by using Virtual Private
Over the Top Tax of 200 Shillings a day was introduced in 2018
amid protests from the public and civil society, who argued that it was a
violation of the right to information and would limit the growth of
IT-based communication. The tax mainly targeted social media users who
accessing it through their mobile phones.
Three years later the tax has been scrapped with the
government realizing less than a fifth of the anticipated 248 billion Shillings in
the first year of implementation. The matter was worsened by the switching off on the internet
for social media use during the general elections in January, when more Ugandans
opted for a VPN to access the sites.
have since continued with it especially since it is the only way they
can access the most popular social site, Facebook, which remained
blocked by the government to date.
The Director of Economic Affairs at the Ministry of Finance,
Planning and Economic Development, Moses Kaggwa says while this is expected to
reduce on the tax administration challenges and increase revenues, it will plug
the revenue gap left by the VPN users.
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Kaggwa also gave justification that the new tax and the removal of
OTT followed public complaints that it was stifling communication, and
therefore, the ministry thought the excise duty would make it easier for the internet
users. But he also says OTT was unfair because users like students were
suffering more than others, adding that the new measure will not hurt
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was during an engagement between the government and private sector
players, who expressed concern about the new measures
and their effects on the economic activities and livelihoods of
Ugandans. Former Agriculture Minister, Victoria Sekitoleko, expressed
concern at the rate government is changing policies, hardly giving any
for them to bear fruit and be evaluated before changing.
But she also reminded the government to first give back what
it owes the private sector so that to revive economic activity. The private sector demands more than 4 trillion Shillings for
supplies and services made to the government over years.
Sekitoleko is also worried about the failure of the government to
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There are growing calls on the government to improve the relationship
between the tax sector and the public so that Ugandans can find paying taxes
more attractive. This would also increase compliance, reduce the cost of administration
and enforcement and in the end lead to higher tax revenues.
Commissioner for domestic taxes department, James Odongo, said the tax
body has improved its tax education drives but will continue introducing more
outreach programs to reach more people.
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URA Commissioner Legal Services, Patience Tumusiime admitted that corruption persists but cited tax agents as the main culprits. She says however that measures including stricter screenings have been employed
and next year, they hope the problem will be reduced.