Social media tax fails to raise expected amount

Wednesday July 17 2019
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Most marriages have tested the wrath of social media. Couples have continuously brought their battles on the platforms and later wondered why everyone is in their business

A controversial social media tax introduced in Uganda last year has raised just Shs49.5 billion which translates to about 17 per cent of the expected revenue.
Uganda Revenue Authority (URA) Commissioner General, Ms Doris Akol, said the shortfall was due to people using wireless networks and virtual private networks to avoid the daily tax of Shs200 (about $0.05).

"The story for OTT is very different, it was targeted at Shs 284 billion but we only collected Shs 49.5 billion and it performed 17.4 per cent against what was targeted. So OTT did not perform well at all. We think it was affected by use of Wi-fi in internet covered areas and as well as the continued use of VPNs to avoid paying the tax," Ms Akol said.
The government said the levy was needed to raise more funds.
It led to street protests and was criticised for being part of a wider attempt by the authorities to stifle free speech and prevent social media from being used to organise peaceful protests.

However, Ms Akol said an improved economic environment paved way for the taxman’s Shs258 billion revenue surplus in the just-concluded financial year.
During the financial year 2018/19, the economy grew by 6.1 per cent against the projected growth of 6 per cent. This triggered economic growth in some key revenue contributing sectors.

Presenting the annual revenue performance under theme: ‘Transparency and Accountability for Effective Service Delivery,’ Ms Akol disclosed that major revenue contributing sectors registered positive growth during the financial year, citing mining and quarrying sector which grew by (17.6 per cent, trade and repairs at 6.6 per cent and construction recording a 5.7 per cent growth. Others were manufacturing (at 4.4 per cent), financial and insurance activities (8.3 per cent) and public administration (10.6 per cent).
“All these contributed to our estimated revenue surplus of Shs258.89 billion,” Mr Akol noted.

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