Uganda approves social media and mobile money tax law

Uganda's parliamentarians have approved the proposed law to tax social media users and mobile money. The approval came after the presentation of a report of Uganda's finance committee regarding suggestions presented by the government through the Excise Duty (Amendment) Bill.

The social media tax is expected to be implemented in July 2018 according to Uganda's government as was also initially announced in April 2018 when the law was proposed.

The law is worrying for social media users in Uganda as it means that, on top of buying a mobile phone and purchasing Internet access data bundles, they now will be subjected to a daily tax of Shs 200 (approximately $ 0.05c). This will affect users of platforms such as Twitter, Instagram, WhatsApp, Facebook, Telegram and Skype among many others.

"Let us increase taxes for example on tobacco consumption because after all it is written that taking in tobacco kills your life. Let us put more taxes on the consumption of alcohol. Can we put more taxes on the sachet waragi such that we can make our youth to be more productive. We’re in a country where more than 70 per cent of our youth are unemployed. We’re in the country where the boda boda industry is the one that is employing more of our young people. By taxing the boda bodas, we’re telling these young men that go back on the streets without jobs and then we begin crying of butayimbwa wielding people who are killing Ugandans. What message are we sending to these young people?," argued Winnie Kiiza, opposition leader, against the new taxes during the debate before the law was approved.

As far as the mobile money tax is concerned, every mobile money transaction in Uganda will be subjected to a 1% excise duty. Based on current usage levels and forecasts, Uganda's government is projecting to be able to collect about Shs 284 billion (approximately $75 million) using the newly introduced taxes.

What remains to be seen now is how the government intends on tracking and enforcing the social media and mobile money taxes.

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