Parliament’s committee on Information and Communication Technology has ordered the Information and Communication Technology (ICT) ministry to conduct an assessment on the impact of the social media tax that was introduced by government at the beginning of the 2018/19 financial year.
The committee chaired by Annet Nyakecho said Over The Top tax seems to negatively affect the consumption of ICT services and products.
In response, ICT Minister, Mr Frank Tumwebaze admitted that the tax is has had adverse effects on the sector.
He said they were “hoodwinked” by their counterparts in the Finance Ministry that the introduction of the tax on the basis that it would widen the country’s revenue base.
One month after its introduction, Uganda Revenue Authority collected Shs4.7 billion from the social media tax and Shs22.3 billion from Mobile Money transactions.
The taxes were part of the new measures that came into effect at the beginning of the 2018-2019 financial year. Subscribers are charged a daily fee of Shs200 to access social media sites like Facebook, Twitter, WhatsApp and Instagram, while 0.5 percent is charged on every mobile money transaction.