The Internet Society Uganda Chapter wishes to express our deep concerns about the proposed amendment on the Excise Duty Act 2014, with respect to the introduction of excise duty to telecommunication services especially “over the top (OTT) services”.
Whereas we appreciate government’s desire to create more avenues to collect taxes to facilitate the development of Uganda, we are deeply concerned that over taxing Internet users is likely to have a negative impact on the development of the Internet and the Information Communication Technology (ICT) sector at large. Global rankings place Uganda on the right path to recognition of ICT as an enabler for development, thanks to the enabling legal and regulatory environment that has facilitated investment in the sector by both government and private sector.
Evidence suggests that an unimpeded Internet is a key enabler to realizing sustainable development. The Internet and social media are playing a key role in facilitating discussion, inspiring action and enabling engagement both at citizen-to-citizen and government-to-citizen level. There are about 18M Internet users according to the Uganda Communication Commission (UCC), out of a population of 40M. Majority of these users are utilizing social media platforms with Facebook, Pinterest, Twitter, YouTube, Instagram, among the most accessed. These platforms which are mainly used by the youth can spur innovation by creating the local content that will lead to the realization of Uganda’s digital vision.
Already, the Internet and social media are enabling many Ugandans with opportunities to do business, hence acting as a step for many young people to innovate and produce locally relevant content that is a much-needed component of efforts towards bridging the digital divide. Moreover, the use of social media and OTT services has also led to an increase in consumers’ demand for data services/bundles provided by mobile network operators, thus users are already paying telecom operators fees for using the broadband services over which these services operate. Increased use of OTT services also means increase in uptake of smartphone devices.
With these benefits derived from free use of OTT, and in a country where Internet usage is being driven by social media use, it thus becomes important to create an environment where people can freely explore the enormous opportunities offered through use of these platforms and their related services.
Further taxation of services derived from using these platforms is thus likely to hinder the free flow of ideas needed to drive Uganda’s digital vision agenda. In addition, taxation will increase costs of data, making access harder for many to connect online.
We therefore call upon the Government of Uganda to take into consideration the above concerns by completely dropping the proposed taxes on over the top (OTT) services.
We also urge the government to make the Internet more affordable by dropping taxes on smartphones and other ICT devices like computers as this will go along away in making the Internet more affordable for all Ugandans thus easing access to information. This will in the long-run drive business opportunities thus achieving the government’s much needed revenue for development.
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