Social media tax subscriptions and revenue decline by millions, UCC report reveals

A quarterly report by the Uganda Communications Commission (UCC) has revealed a significant decline in social media tax revenue collection and subscriptions.

The tax, which was introduced in July 2018 to generate additional revenue and curb lugambo (gossip), is being evaded by a section of Ugandans who prefer to use VPN to access social media.

UCC's report shows that tax revenue generates from social media tax reduced from UGX5.6 billion in July to UGX3.9 billion at the end of September.

Also, 6.84 million people paid for the tax compared to 8.04 million people in July 2018 when the tax came into effect.

The tax allows internet subscribers to access social media platforms like Facebook, Instagram, Twitter among others -- only when they have paid a daily UGX200.

Reduction of internet subscribers

There was a reduction in the number of internet subscribers following the implementation of social media tax, formally known as Over The Top tax.

The reports show that the number of internet subscribers also reduced from 16 million to 13.5 million.

"In the last three months of the quarter under review, both the number of OTT taxpayers and the figure for the OTT revenues were in the declining trend," the report says.

Early this month a parliamentary committee tasked the ICT ministry to carry out an assessment on the impact of social media tax.

The move comes after reports that the tax was negatively affecting the ICT sector.

ICT Minister Frank Tumwebaze told the committee that the tax indeed affected the ICT sector.

Also Read: Everything you need about the contentious social media & mobile money taxes in Uganda