The Ministry of Finance introduced the Excise Duty (Amendment) Bill 2021 in which 12% tax will be levied on internet data as substitute for Uganda’s debatable Over The Top (OTT) tax which was introduced in July 2018 to regulate social networking platforms.
Starting today, 1st July all internet users of different telecom operators will be obliged to pay 12% tax. This means that from every data package an internet user buys, 12 percent tax will be charged off. However the new internet tax will be indirectly deducted so the user will not notice any charges and changes. This draws us back to the old times and could be a game-changer. There is no need to worry about the extra UGX 200 for OTT after buying a data bundle.
Uganda’s biggest telecom companies both MTN Uganda and Airtel Uganda will maintain their pre-paid data prices despite the new 12% tax on internet. As of now get ready to buy your data bundle and browse like a boss. Let me break it down, all the user needs is to buy data, forget about paying OTT tax and leave the rest of the 12% tax nightmare to the telecom companies.
The internet tax development was issued after the Uganda Communications Commission (UCC), released a report that showed that only 13.1 million people pay tax on OTT out of 18.9 million internet subscribers in Uganda. The report adjusts that the rest of the internet users had resorted to virtual private networks (VPNs) to stay out of government sight.
How to pay for new 12% internet tax in Uganda
The new internet tax is charged indirectly on your data bundle as such you do not have to pay separately for this tax. Assuming you want to buy a data bundle of UGX 500 on your MTN or airtel line, the bundle will cost you UGX 500 with tax inclusive.