Facebook has warned it will hold back infrastructure investments it was planning for Uganda because it will be affected by the country's tax on social media use.
Mr Kojo Boakye, the Facebook Africa public policy manager, said during a discussion to deliberate on the impact of the new tax, they have informed Uganda Communications Commission (UCC) of their intention to take their investments elsewhere.
This is because the model on which they based them would be affected by the UShs200 (Sh5) daily social media tax, he said.
However, Mr Godfrey Mutabazi, the UCC executive director, on Tuesday toldthe Daily Monitor that although they met Facebook official to discuss the social media tax, they did not indicate they would take their planned investments elsewhere.
“We talked about social media tax but we did not talk about anything to do with them taking their investments elsewhere. Even in Europe, there is social media tax and they [Facebook] have not taken away their investments,” he said.
Facebook is in the process of offering free Internet access for all its sites in about 42 Africa countries.
The service, which will be offered under the Free Basics initiative, will allow mobile phone users to access Facebook and associated sites free of charge.
However, Mr Boakye did not clarify which particular investment they will be withdrawing.
Mr Boakye recently indicated they would use dialogue to engage government on social media tax before taking any drastic measures.
Uganda recently implemented a daily charge that each mobile phone user needs to access social media sites such as Facebook, Whatsapp, Instagram and Twitter, among others.
Facebook Inc is one of the largest social media sites and owns a number of others such as Whatsapp and Instagram.
A study conducted by Research ICT Solutions found that Ugandans spend a monthly average of UShs9,000 (Sh244) on voice calls, messaging and the Internet.