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Social Media Tax: Business leaders, IT experts warn govt

Renown IT expert, Michael Niyitegeka cautioned telecom firms in Uganda to prepare to pay a bigger price as data purchases will tremedously drop as a result of the social media tax (FILE PHOTO)

KAMPALA – As government moves to enforce daily taxing of social Media, Information Technology specialists have warned government on the controversial levy, saying it will shred the development in the telecommunications sector.

The Uganda Revenue Authority, on July 1 started enforcing Shs 200 daily social media tax, which has been widely criticized as double taxation as well as over burdening the less privileged.

Speaking to Journalists on Monday, Mr Michael Niyitegeka a renown IT expert says: “Telecom companies should prepare to pay a bigger price since those who can buy data will tremendously reduce,” he said.

“This tax will not only infringe on people’s access to information but will also kick out many Ugandans from using technology. It’s very costly,” Mr Niyitegeka said, adding that OTT [social media] tax is detrimental on the government’s efforts to having Uganda as an ICT driven country.

He said that Telecom companies need to lobby government to have the tax revised saying that telecoms relying on selling will soon close should the tax not be revised.

Business community warns govt

Following the enforcement of social media revenue on Sunday July 1, the business community has expressed fears about the likely increase in cost of doing business in Uganda.

Mr Everest Kayondo, the chairman Kampala City Traders Association said that social media had made communication between traders and their clients easy.

“Many traders have been communicating via social media and thus taxing them again is likely to affect the cost of doing business,” Mr Kayondo told PML Daily.

Kayondo now wants the government to revise the tax because it will daily business operations, and the bottom line.

“The number of people loading airtime is likely to decrease,” he said.

“The government must consider taxes it’s getting from airtime visa-a-vis what it’s likely to get from taxing social media,” Mr Kayondo said.

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