The Excise Duty (Amendment) Bill, 2018, seeks to impose a daily UGX200 tax on usage of social media, including Facebook, WhatsApp, Instagram and Twitter. -- equivalent to about UGX70,000 annually.

A 1% tax will be levied on the total value of mobile money transactions.

The new approved tax measures, which are aimed at growing the domestic budget financing with additional revenue of UGX400bn, will take effect on July 1st, 2018.

Read Also: High earning Ugandan officials donate only $12 to orphans

The bill also seeks to introduce excise duty on cooking oil and on motorcycles at first registration.

How it started

In March, Uganda's President Yoweri Museveni proposed the approved tax measures blaming Finance Ministry and Uganda Revenue Authority of failing to identify more tax sources to fullfil "our obligations to people and end borrowing and dependency on aid".

He proposed the introduction of a ‘small fee’ of UGX100 on sim-cards using Whatsapp, Skype, Viber, Twitter and Facebook.

The president also argued that the proposed tax on social media would be a "resource to cope with the consequences of lugambo (rumormongering).

Reactions

Opposition Members of Parliament voiced thei concern over the passed Excise Duty (Amendment) Bill, 2018.

"Let us increase taxes for example on consumption of cigarettes and alcohol which in any case affects peoples' health. We are just being unfair to a population which has already suffered unfairness" - Leader of Opposition in Parliament Winnie Kiiza

"The 1% tax targets the poor. I have an ATM card and I can access my money easily. This tax is making the poor Ugandan poorer. A tax that targets poor people should not be entertained." - Sizomu Wambedde

"As a cattle keeper, I know which cow to milk to produce milk. When you say money has moved from banks to digital, are you saying, let is punish them? When you withdraw money, you are paying so much. There are no banks down there. Why the 1%?" - Pentagon Kamusiime

"OTT services do not attract excise duty, unlike voice calls that attract VAT and excise duty. This is unfair and inequitable for consumers who buy airtime & use it to make voice compared to those who buy internet data and make VoIP calls." - Joy Katali