Ugandans will from July 1 start paying a 12 percent excise duty on their mobile data packages. The government passed the Excise Duty (Amendment) Bill, 2021 in April this year, after falling short of a projected $80m in tax collections.
The new levy will replace the country’s Over-the-top services daily tax that was introduced in 2018. Popularly known as ” social media tax” users were expected to pay based on their use of the internet but failed to raise enough revenue in the 2018/2019 financial year.
A report from Uganda’s communications commission shows that the country had 18.9 million mobile internet subscribers but only about 11.3 million subscribers paid the “social media” tax resulting in the revenue shortage.
Former presidential candidate, Robert Kyagulanyi, popularly known as Bobi Wine led a series of protests against the “social media tax” in 2018. This resulted in more people installing VPNs, making it impossible for the government to track.
The 12 percent excise duty will be exempt for mobile data purchased for the provision of medical and education services. It is however not clear how the distinction will be made.