Govt to review method of charging social media tax

What you need to know:

  • Pay before access. Users currently need to pay Shs200 before they can access social media sites such as Whatsapp and Facebook.

Kampala. Government has said telecoms must embed social media tax (over the top) in data transactions instead of charging it directly as it is currently done.
Last Sunday telecoms blocked social media access, requiring users to pay Shs200 in tax to access such platforms.
However, in an interview early this week Uganda Revenue Authority (URA) said the implementation of the social media tax payment needs to be reviewed since, according to the Excise Duty Law, the tax is indirect and should be incorporated in the final price.
Mr Ian Rumanyika, the URA head of public and corporate affairs, told Daily Monitor in an interview that the tax ought to be charged indirectly and not directly.
“The law says … Excise Duty shall be remitted … indirectly. Telecom companies should be benchmarking how to make sure it is not felt by the consumer,” he said, adding the method of implementation has resulted into an unnecessary uproar.
The law, Mr Rumanyika said, will be reviewed soon with the view of collapsing the charges into data transactions.
“Usually there is a meeting that reviews all the amendments. So if there are any flaws, they are straightened up and this might be some of the issues,” he said.
However, telecommunications companies yesterday told Daily Monitor they were not aware of the proposal to review the method and would continue to charge the tax as earlier instructed by government.
Ms Sumin Namaganda, the Airtel communications manager, said yesterday they would, until further notice, continue with the current charging system as earlier instructed.
The payment, she said, is currently made through mobile money or airtime vendors.
Telecoms recently effected the ban on the sale of airtime scratch cards, which means that airtime or data is acquired electronically.
Mr Edgar Karamagi, the Africell public relations manager, told Daily Monitor the Shs200 was being charged as communicated by URA.
All correspondence from URA, he said, had stipulated that the tax was “chargeable at the point of access of over the top (OTT) sites and not through airtime”.
“As such we are following their [URA] directive on this,” he said.
Efforts to get a comment from MTN by press times proved futile.
Additionally, Mr Rumanyika said Smile Telecom, which had offered to pay the social media tax for its customers, must review its offer, arguing the tax is meant to be paid by the final consumer.
On Tuesday, Mr Felix Owilo, the Smile Telecom head of marketing, told Daily Monitor, they had offered to give back to customers by paying the Shs200 tax for at least three months.