Uganda

Uganda minister proposes daily SIM card fee for social media users

Uganda State Minister for Planning, David Bahati
Uganda's State Minister for Planning David Bahati. He has proposed a daily tax of UShs100 (about Sh3) on all social media users. FILE PHOTO | NMG 

The Ugandan government has proposed a daily tax of UShs100 (about Sh3) on all social media users.

While addressing journalists at the Uganda Media Centre Thursday, the State Minister for Planning David Bahati said the fee will be charged daily on each SIM card that connects to the internet for social media.

President Yoweri Museveni recently revealed he was planning to introduce taxes on social media platforms such as WhatsApp, Facebook, Twitter, Skype and Viber, claiming that people use these platforms mainly for lugambo (gossip).

He however received backlash from social media users, including human rights defenders and opposition leaders, claiming the new tax proposals are “diversionary, deceptive, injurious to individual freedoms and burdensome”.

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According to Mr Bahati, these tax measures are aimed at growing domestic budget financing.

Mobile transaction tax

The government has also introduced a 1 per cent tax to be charged on each and every mobile money transaction made, that is, withdrawals and deposits.

Mr Bahati said the economy grew at 6 per cent this financial year as opposed to 5.5 per cent as earlier projected.

He attributed this to significant growth in agriculture, services and industry sectors.

The government has also introduced UShs100 tax on each litre of fuel for road maintenance, and income tax on 30 per cent of every Savings and Credit Cooperative Organisation (Sacco’s) net profit.

Mr Moses Ogwalpus, the acting commissioner tax policy at Ministry of Finance said each and every Sacco will pay 30 per cent of the net profit like any other company doing business.

“If Saccos charge interest or members or people they lend to, and out of that they make profit, then they pay 30 per cent income tax on the net profit," Mr Ogwalpus said.

Minister Bahati said the tax proposals will begin effectively July 1 once debated and approved by parliament.