Even as he announced a reduction in the mobile money transaction tax, President Museveni yesterday insisted government will not rescind the tax levied on social media users.
Since Sunday, there has been a public uproar over the newly introduced shs200 tax per day for social media users.
In a statement released on Wednesday, Museveni said that mobile money tax will be reduced to 0.5% from 1% but insisted that the country does not have to continue borrowing huge sums of money from outside when there are avenues to get revenue locally.
Museveni said there had been a miscommunication regarding the mobile money tax although in various correspondences written between March and June, the president did not appear opposed to the 1% tax.
In fact, he vehemently justified it when he delivered his state of the nation address last month.
Turning to the social media tax, Museveni said: “As to social- media tax, all the moral reasons are in favour of that tax. The social – media users have no right to squander the dollars I earn from my coffee , my milk etc by endlessly donating money to foreign telephone companies through chatting or even lying and, then, they are allergic to even a modest contribution to their country whose collective wealth they are misusing.”
“Social media chatting is a luxury by those who are enjoying themselves or those who are malicious.”
According to Museveni,the country gets revenue from consumer taxes on mainly luxuries, income tax, profit tax and import tax on consumables and the country ends up with a low GDP.
He noted that there have been challenges like under declaration of calls by telecom companies, and those supposed to pay taxes of incomes from rent don’t pay that he said have contributed to little revenues for the country.
He challenged social media users whether they do it for free or first pay and whom the money goes to.
“If you pay in local shillings, do the ones you pay, most of whom are foreign companies, take money out of Uganda in local shillings or in dollars? If it is dollars, who earned those dollars?”
The public has been up in arms over the social media tax with many accusing government of deliberately introducing the tax as a move to deny many citizens access to information.
A group of concerned citizens on Monday sued government over the social media tax arguing that it suffocates internet based or enabled businesses, budding entrepreneurs, job searching, talent promotion, creativity and innovation which is an infringement and contravention of economic rights guaranteed by the constitution.
The Uganda Communications Commission (UCC) executive director Godfrey Mutabazi on Monday said government would review the progress of the social media tax after two weeks of implementation.
“After two weeks, the commission together with Uganda Revenue Authority, telecom companies and the Ministry of Finance will meet to evaluate the progress of Social Media Tax,” Mutabazi said.