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Govt tones down, asks Ugandans to abandon VPN and pay tax as Shs7b is collected in two weeks

Information minister Frank Tumwebaze darned VPN users that they instead pay 30 times OTT tax to the VPV owner. (FILE PHOTO)

KAMPALA – Information minister Frank Tumwebaze has blasted Ugandans who opted to using VPNs instead of contributing to the country’s development as government holds its ground on the social media tax.

Tumwebaze on Tuesday July 17, while addressing journalists at Uganda Media Centre in Kampala said “Whether UCC succeeds in blocking VPN or not, I am not very enthusiastic about blocking. But ask yourself how much money you are spending in terms of data for you to download VPN in order to enable you to get bypass capacity.”

He wondered “If you are a committed Ugandan who really wants services from your government why are you motivated and proud with your head high to contribute money 30 times the OTT tax to the innovator of VPN?”

Tumwebaze added that the low domestic revenue has pushed Uganda to rely on foreign aid resulting into increasing debt burden saying that it is illogical for the same Ugandans who criticize government for borrowing to reject taxes aimed at developing the country.

“When Ministry of Finance is borrowing, we, the Parliament and civil society are grilling them for borrowing. But when we say this is a sector that has grown in the economy so let’s get a bit of it, let’s get Shs 6,000 from every holder of a smartphone consuming OTTs, what production capacity will it stifle?”

Some social media users have since the introduction of the Shs 200 tax on Over the Top services early this month resorted to using VPNs which by design bypass local internet access limitations with many saying they rather pay for using VPN than paying taxes whose benefits a few individuals.

When Ugandans rejected the tax and opted for VPN, Cabinet directed communications regulators, the Uganda communications commission to block the bypass, attracting ridicule from experts who said this was not possible.

Meanwhile government has revealed that it has so far collected Shs7 billion from the controversial taxes on mobile money transactions and social media.

The amount has been collected in less than a two weeks ever since the taxes were effected on July 1

According to the Finance state minister for planning David Bahati, the 1% on mobile money transactions has seen Shs5 billion collected while Shs2 billion has been collected from the Shs 200 daily paid by users to access social media platforms.

Concerning the president’s directive to refund all those who paid the 1% percent mobile money tax, Bahati says the attorney general is reviewing the possibility of only refunding the charge on deposits.

Government is expecting to collect shs 284 billion from the over 10 M over the tax users on social media and shs 118 billion from the new 0.5% withdraw charge on mobile money.

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