The Parliament has passed the Excise Duty Amendment Bill which repeals the shs 200 daily excise duty rate for Over the Top Services (OTT). This tax was introduced in 2018 and required subscribers to pay a daily tax of 200 shillings to use social media services like Facebook, Twitter, and instant messaging apps like WhatsApp, which are hugely popular in the country.
The government had introduced the tax with the stated intention of raising revenues and curbing online gossip but, according to Finance State Minister, has been evaded by Ugandans.
The Excise Duty (Ammendment) bill, however, proposes to introduce an excise duty rate of 12% of the fee charged for internet data (except for the provision of medical and educational services).
The bill also reduces excise duty applicable on opaque beer and rebate excise duty on locally manufactured non-alcoholic beverages, plastics, airtime or value added services.
Henry Musasizi, Chair of Parliament’s Finance Committee, noted that the adjustments are aimed at protecting local production, generating revenue given the rising volume of imports and supporting the emerging local industrial sector that has created employment for many Ugandans.
It seeks to provide for an incentive to a manufacturer whose investment capital is over US$50 million by repealing subsections relating to the renewal of certificate of registration of manufacturers, importers and providers of excisable goods and services.
However, a shs100 excise duty has been levied on fuel in addition to an excise duty rate of shs100 per kilogram for wheat in a bid to generate revenue given the rising volume of imported wheat grain.
Honorable David Bahati, State Minister for Finance, urged the members to pass the proposed tax measures especially given the shortfall of last year saying, “The taxes are not meant to kill the economy but rather boost it”.
Discussion of this bill was an item on the agenda of Parliament’s plenary session of Thursday 29th April, 2021 and despite unsuccessful opposition from a group of lawmakers, the bill was passed and now awaits presidential assent for implementation.