Bye-Bye to Over the Top (OTT) tax

With the end of the month of June, all the worries about the Over The Top (OTT) tax shall come to an end.

With effect from tomorrow, Thursday, 1st July, 2021 Ugandas shall once again have the opportunity to access internet services on most social media platforms without worrying about the OTT tax.

Since the government has abolished the mandatory 200 shillings tax meant to be paid on a daily basis to access the internet substituting it with the 12% tax meant to be imposed on internet bundles with effect tomorrow.

Internet data excluding WiFi connection to a phone shall not be accessed to browse the web, use emails, download music or use any online website would require a mandatory payment of a 12% tax.

The government is going to tax the traffic measurements in terms of bytes per particular time units while taxing internet data at a 12% rate with effect from tomorrow instead of the OTT tax.

Basing on a consensus passed by the 11th Parliament, a resolution was passed to abolish the OTT tax in the Excise Duty (Amendment) Act of 2021 which was replaced by an excise duty to be imposed on internet data.

According to finance Minister Amos Lugoloobi while presenting the 2021/22 FY budget said the excise duty tax is meant to accomplish industrialization for inclusive growth, employment and wealth creation.

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Once the OTT tax was passed back in 2018, it was met with great opposition in Parliament which subsequently lead to a mass boycott from the population opting for VPNs to access the internet.

The national taxation body Uganda Revenue Authority informed in July 2019 they had recorded an 83% loss in collection of the OTT tax since they were only able to collect UGX 49.5 billion instead of the estimated UGX 284 billion.

Alternatively, parliament resolved to implement the 12% excise duty tax on internet data and although it was met with opposition, Minister of Finance Amos Lugoloobi said it was meant to reduce on Uganda’s debt burden.

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