The Uganda Parliament yesterday 30th May 2018 passed the Excise Duty Amendment Bill which enforce a 1% excise duty on mobile money transactions. The Social Media tax will see internet users incur a daily levy of UGX 200 for using the likes of Facebook, WhatsApp and Twitter. The tax on social media, in particular, is a directive from the President, Yoweri Kaguta Museveni to the Finance Minister, Matia Kasaija. This tax will come into effect on 1st July 2018
The Social Media tax expected to have far-reaching consequences for the youth who make up the majority of internet users in Uganda. This demographic spends more time on social media using platforms such as WhatsApp, Twitter, Facebook, Instagram and Snapchat.
Quotable: I am not going to propose a tax on Internet use for educational, research or reference purposes. These must remain free. However, olugambo (gossip) on social media; opinions, prejudices, insults, friendly chats, and advertisements by Google and I do not know who else must pay tax because we need resources to cope with the consequences of their lugambo~ President Yoweri Kaguta Museveni in a letter to the Finance Minister Matia Kasaija.
Telecom companies are known to offer special internet data bundles to exclusively cater to these social media platforms. Some of these include WTF bundles by MTN and Airtel Uganda, SWIFT bundles by MTN and Africell and more. These mobile bundles provide internet access to only these social media platforms and are generally cheaper than regular untethered bundles. This can be considered both a gift and a curse.
The tax on the usage of Mobile Money cuts across various the demographics. The 1% levy will affect Sending, Withdrawals and Deposits. Telecom companies already charge transaction fees on Mobile Money and the new 1% levy will subsequently be an extra addition. Hitherto, the costs started from as low as UGX 250 for sending to registered users and UGX 1,000 to unregistered users. Withdrawals from an Agent start from UGX 330 to about UGX 50,000 to a tune of UGX 7,000,000. Deposits have been free up until now, but that’s about to change.
Starting 1st July 2018, a transaction of UGX 5,000, for instance, incurs a transaction fee of UGX 500 and a levy of UGX 50. While this amount appears insignificant, Mobile Money users will definitely feel the pinch of incremental amounts.
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