URA wants to shift tax to data, decries increased evasion of OTT

Tuesday January 14 2020



URA Commissioner General, Ms Doris Akol

URA Commissioner General, Ms Doris Akol 

By Moses Kyeyune

The Uganda Revenue Authority (URA) has proposed a policy shift for government to tax the internet use directly instead of charging over the top tax also known as OTT.
The revelation by the URA Commissioner General, Ms Doris Akol is based on failure by the tax body to collect the revenue targets from OTT.
Akol and a delegation of the technical officers from the tax body had appeared before the Finance Committee of Parliament when she made the suggestions.

She argues that revenue collection from OTT has suffered huge evasions and thus a policy shift to directly charge internet data will reduce the loss of revenue.

Some social media users have been avoiding the tax through the use of virtual private networks.
The committee chairperson, Mr Henry Musasizi (NRM, Rubanda East) has tasked the officials to return alongside ministry of finance officials including the minister and permanent secretary to the treasury to further explain the policy shift.

Controversial tax
OTT remains a controversial tax, which according to data from Uganda Communications Commission, reduced the number of Internet users by three million in the first three months of implementation.

UCC data also shows that collection volumes, in shillings value, have been reducing mainly due to Internet users cutting back on the amount they spend or use of bypass alternatives such as Virtual Private Networks (VPN) to avoid paying the tax.

Genesis

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Parliament in June 2018, introduced a Shs200 tax levy on all telecom subscribers accessing social media sites such as Facebook, Twitter and Whatsapp, among others.
The move followed a directive from President Museveni to the Finance ministry to widen the tax revenue base. The President said social media platforms such as WhatsApp, Facebook, Twitter, Skype and Viber were being used for propagating falsehoods and that for Ugandans to access the sites for what he called Lugambo, they should pay for them.
Government had hoped to generate between Shs400 billion and Shs1.4 trillion from the social media tax annually.

However, the tax was met with stiff resistance from politicians and citizens with many still grappling with court cases over the same matter. On April 29, 2019 Kyadondo East MP Robert Kyagulanyi popularly known as Bobi Wine appeared at Buganda Road Court where he was charged with disobedience of statutory duty, an offence prosecution says he committed in July 2018.

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