Payment for OTT tax stops today, a 12% tax on Internet data starts

Payment for the Over The Top (OTT) tax to access social media in Uganda stops today. Effective July 1, 2021 OTT will be replaced with a 12% tax on internet data bought. OTT has been unpopular and triggered protests when it was introduced in 2018. Since 2018, subscribers have been required to pay a daily tax of Shs200 shillings to access social media services like Facebook, Twitter, and instant messaging and voice communication apps like WhatsApp and viber among others. The government said the tax was intended to raise revenues and curb online gossip. The Uganda Revenue Authority, which had set a goal of collecting Shs284 billion from the tax was only able to collect Shs46 billion by 2019.This is because majority Ugandans have been using Virtual Private Networks (VPNs) to bypass the tax. And recent analysis by the government showed that more than 8 million of the country’s 20 million internet subscribers were not paying the fees. OTT tax was then abolished by 11th Parliament in the Excise Duty (Amendment) Act, 2021, and replaced with excise duty on Internet data in the new financial year, which starts tomorrow.

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