Opinion: OTT and Social Media Tax is failing as anticipated!
The Over The Top Services Tax and Social Media Tax can only be said as utter embarrassment by the National Resistance Movement (NRM). There are enough things to know this would happen, as the plan was for getting the revenue, but not thinking the consequences of the taxes. That is why, today’s revelations about the levied taxes isn’t that surprising.
Without due-diligence, it is hard to know the effects and the means for why it is put. It seems like the President and the NRM had a dream of cash-flowing into the Consolidation Fund without any consequences, but apparently it does. And when you add taxes on things, people either use less or plan more effortlessly to circumvent this added cost on their daily lives.
Daily Monitor Reports: “Government collected Shs20.5b from social media in the last quarter ended September, according to data obtained from Uganda Revenue Authority. The tax, which was implemented in July, was however, less than the Shs24.9b target that URA had hoped to collect in the period. URA has a monthly target of Shs8.3b. The tax was introduced in the Excise Duty amendments of financial year 2018/19 requiring all social media users to pay Shs200 per day, before accessing certain platforms such as Facebook, Whatsapp and Twitter, among others. Government intends to collect about Shs100b before the end of the 2018/19 financial year” (Christine Kasemiire – ‘OTT raises Shs20b in first quarter, URA fails on targets’ 07.11.2018).
While it is a few days ago, that the MTN Uganda promised the 24 hours since paying tax, that the tax would last from the time of payment of the tax until the time is spent. Instead of how it has been, until the new day coming. Meaning, that often you would only get half-a-day with the Social Media, as the taxation would start again, when the clock turns 00:01.
That is why this was news to: “Airtel Uganda and other telecom service providers have announced a fundamental change in the Over the Top excise duty imposed on social media following a directive from Uganda Communications Commission, the telecommunications regulatory body in Uganda. Since its introduction in July 2018, the tax commonly known as OTT or social media tax, was only valid up to midnight of the payment date for daily users. With the recent changes, daily subscribers can now enjoy internet services for a complete 24 hours – right up to the time that they subscribed 24 hours earlier. This also applies to the weekly and monthly users who can also enjoy services until the time that they subscribed” Brian Emorut – ‘Social Media tax validity to now last 24 hours’ 06.11.2018 – Guide 2 Uganda).
So now, Airtel and MTN has changed their pattern of getting the OTT tax. While URA is struggling to met the supposed the quota. This shows that the state had not considered all implications to the levied taxes. The NRM clearly didn’t envision, either the use of VPN and also that people cannot afford it. Because it is barrier to be even using the social media after the taxes.
Surely, the 24 hours usage and the lack of collection. That the Telecoms and the Mobile Money outlets has been pushed and lost revenue is certain. As the data-bundles and Air-Time had to be corrected from July on and also now the barrier for OTTs are changing again. This is surely showing that the Telecoms and the Republic wasn’t prepared for this, but doing it on orders from the President. Peace.