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Social media tax is for infrastructure development – UCC

Godfrey Mutabazi, the UCC Executive Director said OTT service taxes. (FILE PHOTO)

KAMPALA– As Ugandans continue to express their discontent with the newly introduced Over The Top (OTT) tax, the Uganda Communications Commission has come out to reassure the country that the tax was introduced as a measure to raise money for social development.

UCC Executive Director, Godfrey Mutabazi, in an interview on Monday July 2, 2018, said OTT service taxes, aka social media tax, is meant to enhance social development like promotion of infrastructure.’

“This is not something new in the world, it has been done before in the US, UK and Germany, and I hope none of such people are complaining, so we must pay to access internet services,” Mr Mutabazi said at his ofices in Bugolobi, Kampala.

He further stated that social media should be a form of taxation since it’s used by over 31% of Uganda’s 44 million population and posed a challenge to the youths to develop more and better applications and systems to compete with the western world.

A group of citizens led by lawyer Daniel Opio have challenged the social media tax in the Constitutional Court saying it is a bad tax due to the fact that many people have successfully bypassed it using virtual private networks, VPN.

In their petition, the lawyers also urged the Commission to do more research and come up with a better policy.

The petitioners accuse the UCC of unfairly giving an enabling environment for Uganda Revenue Authority (URA) to collect the OTT tax.They also want the Attorney General (AG) to explain why government does not offer free internet services to its citizens.

The group claims the tax was passed with no meaningful public participation, hinders freedom of speech, economic growth, and innovation and will have a negative impact on online media.

The petitioners also contend that if the new tax is not annulled, it will curtail business start-ups and affect job seekers thereby infringing on the economic rights of citizens.

Mr. Mutabazi also stated that they are working on sensitizing the public more about the social media tax.

Reacting to calls by some Ugandans who said the Commission should deduct tax from social media bundles, Mr Mutabazi said it would be double taxation since bundles are already  taxed 18%VAT and 12% Excise Duty.

Meanwhile police was Monday afternoon involved in running battles with a group of demonstrators who, dressed in Makerere University gowns, stormed Parliament protesting the new tax.

Ugandans are to pay OTT tax through mobile money or electronic wallets either daily, weekly or monthly.

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