GSMA report urges Uganda to remove 12 percent mobile service excise levy

KAMPALA, Uganda — The GSMA, which represents global mobile operators, urged the Ugandan government Monday to remove the 12 percent excise levy on mobile services, arguing that the tax is a major obstacle to digital inclusion and economic growth.

The recommendation, part of a comprehensive policy roadmap, states that optimizing taxation is key to unlocking an estimated $3.9 billion in added economic value and creating nearly 1.8 million jobs by 2030. The GSMA projects that tax reforms alone could add 790,000 new mobile internet users.

The report, unveiled at the Sheraton Kampala Hotel, highlighted that Uganda’s mobile telecom sector operates with an Average Effective Tax Rate of 68 percent as a share of pretax profit, significantly higher than the 39 percent rate for the retail finance sector.

“Seventy-five percent of the population in Uganda fell into the usage gap in 2023,” said Angela Wamola, the head of Africa at the GSMA. The usage gap refers to people who live in areas with mobile internet coverage but do not use it, a problem she said is compounded by the high cost of devices, often exacerbated by taxation.

The GSMA’s proposed tax overhaul includes not only removing the 12 percent excise levy, but also aligning mobile money duties with other electronic transaction withdrawal levies, and exempting key telecom technology imports, such as equipment for 4G and 5G networks, from the value-added tax.

Focus on Connectivity and Job Creation

The GSMA’s analysis showed that by jointly implementing all recommendations — covering taxation, infrastructure and device affordability — Uganda could add four million new mobile internet users by 2030. The mobile industry group framed the changes as essential for meeting national goals, including those set out in the Uganda Vision 2040.

Minister of State for National Guidance Godfrey Kabbyanga, who presided over the launch, affirmed the government’s commitment to digital transformation, noting that Uganda already has more than 45.7 million mobile subscribers. He emphasized the goal of achieving 90 percent broadband coverage nationwide.

The Uganda Communications Commission also detailed its progress, with Executive Director George William Nyombi Thembo noting the sector has 34.6 million active mobile money subscriptions. Through its Universal Access and Service Fund, the regulator has connected schools, health centers, and local governments to ensure digital inclusion extends to rural areas.

Ministry Rejects Regulatory Shift

Despite the economic projections, the Ministry of ICT and National Guidance resisted the GSMA’s call for a fundamental shift in regulatory policy on network coverage.

Dr. Aminah Zawedde, permanent secretary for the ministry, said the government prioritizes geographical coverage over population coverage. She argued that only by mandating coverage across all regions could true equity be achieved for every part of the country.

“The Digital Transformation Roadmap cannot be realized in a population-based coverage policy or at the proposed lower broadband speeds,” Zawedde said.

She asserted that the government’s focus is on achieving meaningful connectivity that creates jobs and improves services, and she urged the GSMA to view Uganda as a case study for its policy direction, rather than proposing a “one-size-fits-all policy model for Africa.”

The report highlights a clear policy tension: the mobile industry seeks tax relief to lower operating costs and accelerate consumer adoption, while the government remains committed to universal geographical access mandates, even if they result in a slower rollout of services.

GSMA report urges Uganda to remove 12 percent mobile service excise levy

KAMPALA, Uganda — The GSMA, which represents global mobile operators, urged the Ugandan government Monday to remove the 12 percent excise levy on mobile services, arguing that the tax is a major obstacle to digital inclusion and economic growth.

The recommendation, part of a comprehensive policy roadmap, states that optimizing taxation is key to unlocking an estimated $3.9 billion in added economic value and creating nearly 1.8 million jobs by 2030. The GSMA projects that tax reforms alone could add 790,000 new mobile internet users.

The report, unveiled at the Sheraton Kampala Hotel, highlighted that Uganda’s mobile telecom sector operates with an Average Effective Tax Rate of 68 percent as a share of pretax profit, significantly higher than the 39 percent rate for the retail finance sector.

“Seventy-five percent of the population in Uganda fell into the usage gap in 2023,” said Angela Wamola, the head of Africa at the GSMA. The usage gap refers to people who live in areas with mobile internet coverage but do not use it, a problem she said is compounded by the high cost of devices, often exacerbated by taxation.

The GSMA’s proposed tax overhaul includes not only removing the 12 percent excise levy, but also aligning mobile money duties with other electronic transaction withdrawal levies, and exempting key telecom technology imports, such as equipment for 4G and 5G networks, from the value-added tax.

Focus on Connectivity and Job Creation

The GSMA’s analysis showed that by jointly implementing all recommendations — covering taxation, infrastructure and device affordability — Uganda could add four million new mobile internet users by 2030. The mobile industry group framed the changes as essential for meeting national goals, including those set out in the Uganda Vision 2040.

Minister of State for National Guidance Godfrey Kabbyanga, who presided over the launch, affirmed the government’s commitment to digital transformation, noting that Uganda already has more than 45.7 million mobile subscribers. He emphasized the goal of achieving 90 percent broadband coverage nationwide.

The Uganda Communications Commission also detailed its progress, with Executive Director George William Nyombi Thembo noting the sector has 34.6 million active mobile money subscriptions. Through its Universal Access and Service Fund, the regulator has connected schools, health centers, and local governments to ensure digital inclusion extends to rural areas.

Ministry Rejects Regulatory Shift

Despite the economic projections, the Ministry of ICT and National Guidance resisted the GSMA’s call for a fundamental shift in regulatory policy on network coverage.

Dr. Aminah Zawedde, permanent secretary for the ministry, said the government prioritizes geographical coverage over population coverage. She argued that only by mandating coverage across all regions could true equity be achieved for every part of the country.

“The Digital Transformation Roadmap cannot be realized in a population-based coverage policy or at the proposed lower broadband speeds,” Zawedde said.

She asserted that the government’s focus is on achieving meaningful connectivity that creates jobs and improves services, and she urged the GSMA to view Uganda as a case study for its policy direction, rather than proposing a “one-size-fits-all policy model for Africa.”

The report highlights a clear policy tension: the mobile industry seeks tax relief to lower operating costs and accelerate consumer adoption, while the government remains committed to universal geographical access mandates, even if they result in a slower rollout of services.