President Museveni has directed the Ministry of Finance to introduce a tax on the usage of social media as one of the ways for government to raise revenue as well as curtailing gossip by Ugandans.
In a March 12 letter to the finance minister Matia Kasaija,Museveni says there is lack of seriousness by the ministry and Uganda Revenue Authority in identifying tax sources and collecting more tax for the country to stop borrowing and also government to fulfil its obligations to the people, hence the new directive.
“I am begining to confirm that there is total lack of seriousness at the very least or collusion among your tax identifiers and collectors, Museveni says in the letter.
“I will only take two sectors: telephones data transmission and the housing sector which generates rented incomes.”
The president argues that government misses a lot of money in form of taxes when it fails to tax non educational communications on the internet, citing Facebook and Whats app as some of the social media platforms from which government can get money.
“Olugambo(gossip) on social media (opinions, prejudices, insults ,friendly chats) and advertisements by Google and I do not know who else must pay tax because we need resources to cope with the consequences of their lugambo,”Museveni adds.
He however says that internet use for educational, research and reference purposes will be exempted from the new tax.
“It is like going to the library using the encyclopedia or referring to the dictionary .These must remain free.”
He suggests that government should introduce a shs 100 fee per day for sim cards that are used by the over the top platforms including skype, facebook, whats app, twitter and viber, government would generate an additional revenue totaling to shs 400 billion per year that could be used for the benefit of all Ugandans.
According to the Finance Minister Matia Kasaijja, the president’s recommendations have been approved by cabinet awaiting to be included in the forthcoming budget.
“It was not only the president’s letter but the whole cabinet discussed the issue and part of our tax measures for the coming financial year. What is remaining now is the implementation mode,”Kasaija said.
Ugandans took to social media blasting President Museveni and government over what they termed as being dictatorial.
“What kind of madness is this? A country whose only way of generating revenue is first and foremost taxing it’s citizens to the bone marrow needs new direction in terms of leadership and socio-economic policy,” said one Ronald Ogwal on twitter.
However, experts supported the move as one that will benefit the country in terms of increased taxes.
Julius Mukunda from the Civil Society Budget Advocacy group (CSBAG) says the move is welcome because it will be paid by those who can ably use internet.
“It is an area that has been untapped and had been exploited by telecom companies. It is very important we tap into this area as government to widen our tax base,”Mukunda said.
Economist Ramathan Ggoobi also welcomed the idea as one of the ways that will help increase taxes that government collects.
“The Ministry of Finance is supposed to come up with a tax policy and I think they have been lazy. They have been targeting areas which are easy to target,”Ggoobi told NBS television.
He however noted that many people will oppose this new tax but noted that this is the nature of Ugandans to oppose anything new.
“I don’t think there will be any tax which will be proposed and people are happy. There is an anti-tax among the elite. Now that this tax is going to affect many people, it will be tricky to propose.”