The Ministry of Finance is planning to introduce a digital service tax in the next financial year that will compel subscription-based online video and audio content providers to contribute to Uganda’s economic development.
The plan targets companies like Netflix that are fast becoming content providers for many Ugandans.
Speaking at the sidelines of the forum aimed at putting the youth at the forefront of fiscal governance for a better Uganda, Moses Kaggwa, the Director of Economic Affairs in the Ministry of Finance said that they would like to work together with these companies to ascertain the revenue collected from Uganda so as to come up with a tax that will see government widen its tax base.
“We can amalgamate or match the transactions that have been done in the country or together with with their value and we tax that base on the gross. We can have a tax linked to gross revenue from Uganda but we need corporation,” Kaggwa said.
Access to subscription-based online content providers like Netflix, HBO, Disney, iTunes among others continues to rise in Uganda with people mainly in the urban areas spending a fortune annually to access premium content from the providers.
The concerns however are that although Ugandans pay to access such platforms, the Uganda government does not charge tax on this revenue due to a number of existing international agreements that the companies take advantage of.
The Digital Tax will now allow Uganda to at least have a share of the revenue that these multinationals earn from Uganda.
Grace Namaganda, a programs officer at SEATIN-U, said that this will help government to widen its net.
“Businesses are now going digital so that is a space that government can tap into instead of milking small businesses. We see a lot of multinationala going digital and that is one space we can tap into,” Namaganda said.
Ugandans that Nile Post talked to about this new development were not in support of the idea.
“So USA, Europe and Asia will also start collecting taxes from Ugandans launching digital products for the international market. This is wrong,” Hilder Koriang, an e-health advocate and professional health worker said.