If you would like to get in touch with a business contact, friend or relative in Uganda today, chances are high you will use one of the following; Skype, Twitter, Facebook, WhatsApp or LinkedIn and the like.
While for you it may not be a problem, your contact in the East African nation has to first pay a new excise tax introduced by the Ugandan government in order to connect with you.
For 11 days now, Ugandans and people living in Uganda have had to part with 200 shillings daily (US$0.05) before accessing applications and websites categorized as over the top services (OTT).
The tax launched on July 1 is a culmination of President Yoweri Museveni’s comments that Ugandans use social media for gossiping. However, after it was implemented and resistance to the tax grew, he came out to explain that the tax is meant to cover the national budget deficit and curb dependence on foreign aid and borrowing. At the start of June, the parliament passed a budget of 32.3 trillion shillings (about US$8.5 billion)
According to David Bahati, Uganda’s Minister of State for Finance, Planning and Economic Development, 60% transactions are outside the tax base. The government hopes to generate 16 trillion shillings as revenue from taxes on social media, mobile money and an increase in fuel prices.
More information in this week’s Business segment.