Overview:
Kampala Central Division MP, Hon. Muhammad Nsereko said that the tax lacks clarity in terms of applicability.
Ugandan Members of Parliament have rejected a proposal by the Government to levy a five percent tax on global entities offering digital services and or products in Uganda.
During plenary on Tuesday, the legislators argued that the tax needed to be premised on an informed research and clear processes of how it would implemented, if adopted.
Kampala Central Division MP, Hon. Muhammad Nsereko said that the tax lacks clarity in terms of applicability like the ambiguity in the distinction between resident and non-resident digital service providers which could result in double taxation, stifling the growth of the digital economy.
“The Ministry of Finance did not provide us with anything like so; we are just on fishing expedition trying to hunt out for taxes wherever they are with no adequate knowledge. That is why I asked, ‘who has the facts on how many people are having promotive advertisement, using digital platforms. How many know the users of data services?’”
“The Ministry of Finance did not provide us with anything like so; we are just on fishing expedition trying to hunt out for taxes wherever they are with no adequate knowledge. That is why I asked, ‘who has the facts on how many people are having promotive advertisement, using digital platforms. How many know the users of data services?’”
Muhammad Nsereko, Kampala Central Division MP
Nsereko added that a lot of work is conducted online supporting forms of remote employment which would be affected by the introduction of digital tax.
“When we are here to legislate on tax, we should make our countrymen aware. What is our projection from what we are imposing on to them…So that we are certain that we are introducing a tax based on facts and statistics,” Nsereko added.
The Minister of State for Finance, Hon. Henry Musasizi said that the tax was specifically targeting the non-resident companies to protect the local players who provide similar services.
The bill that was passed in a House sitting chaired by Speaker Anita Among on Tuesday, 02 May 2023 will also see the imposition of a 15 per cent tax on all monies realized in any stake placed and won by persons indulged in betting.