Telecom companies have moved to scrap the over-the-top tax (OTT) as part of government plans to replace the unpopular tax in the financial year 2021/22, which begins on July 1, 2021.
On their menus, the telephone firms have been offering different options for OTT ranging from daily to annual subscriptions.
But with only 2 days to the end of the current financial year, MTN and Airtel have scrapped their monthly and annual subscriptions for OTT Tax.
“Please note that since the month is soon coming to an end and therefore it is less than a week, that’s why we have only the daily option left. Effective July 1, there will be no more OTT,” Airtel said in a social media post.
Since 2018, the government has levied a Shs200 daily OTT Tax on services such as Facebook, Twitter, and WhatsApp among others.
But in the new budget for 2021/2022, the Ministry of Finance slapped a harmonized excise duty rate of 12% on airtime, value-added services and internet data as substitute for OTT.
The tax on Internet bundles is one of the seven new taxes that the government wants to apply from July 1 – when the next financial year starts.
A Market Performance Report issued by the Uganda Communications Commission (UCC) early this year indicated that the number of Internet subscribers who are not paying the tax was at least 7.6m of the target 18.9m subscribers.