A statement released by The Information Communication Technology Association of Uganda (ICTAU) said “The new taxes on Mobile Money transactions will make these financial services less accessible to already underserved and vulnerable populations”
Albert Mucunguzi the chairperson said that the flat tax on social media and other common internet services will disproportionately affect the large number of Ugandans who live in poverty, further widening the digital divide, while limiting the public’s ability to access information, communicate and express themselves.
Mucunguzi also said that these taxes were enacted by the Government of Uganda without sufficient deliberation or consultation and are not supported by evidence-based research will undoubtedly constrain the development of our industry, economy, and society.
As July 1 2018, marked the start of the 2018/19 financial year new taxes took effect among them is the mobile money and social media tax. These two taxes are expected to raise 284 and 115 billion shillings respectively.
Mucunguzi cautioned on the effect of these taxes saying, “The increased cost of using Mobile Money services will encourage people to revert to cash and the informal economy. This increases risk and decreases the ability of Government, businesses and individuals to monitor and account for economic activity.”
These taxes that have raised concern among members of the public saw a group of six individuals on Monday sue government for imposing a tax on social media, the group in its petition said that the new tax limits access to social media and in turn violates the right to freedom of expression, public participation, political mobilization, peaceful assembly and unarmed demonstration.
However, while addressing a press conference yesterday the state minister for Finance David Bahati defended the tax saying “Government is implementing the Excise Duty Amendments for Telecommunication 2018/2019 as a small contribution of citizens towards the development of their country.”