OTT tax is not yielding as it had been anticipated. It should be abolished says, URA boss Doris Akol
Uganda Revenue Authority (URA) boss Doris Akol has called for the removal of some non-tax charges on government services including Over the Top Tax (OTT), renewing passports and driving permits.
While addressing the Parliamentary Finance Committee on Tuesday 14th January, the URA Commissioner General Doris Akol said that these non-tax charges including OTT have underperformed per the expectations and thus the government has to look into eliminating them.
Doris Akol who was appearing before the committee said that OTT was targeted at Shs. 284 billion but they were only able to collect Shs. 49.5 billion meaning it performed at 17.4% against what was targeted.
“Some non-tax charges on some government services like verifying land titles, renewing passports, driving permits among others should be abolished to address the tax morale issue in Uganda,” Akol said.Tweet
“The story for OTT is different. It was targeted at Shs. 284 billion but we only collected Shs. 49.5 billion. It performed at 17.4% against what was targeted,” she added.Tweet
Besides, Akol proposed for the amendment of the Excise Duty Act in respect of the excisable goods and services to provide for mobile data.
Akol explained that by amending the Excise Duty Act it will make it possible to tax mobile data to counteract OTT evasion thereby increasing the tax collection.
Meanwhile, she implied that many locals have taken it upon themselves to use alternative measures in the name of avoiding to pay the tax.
“Many people in the country have resorted to using Wi-fi in internet covered areas as well as the continued use of VPNs and this was attributed to low tax collection from it, Akol implied.Tweet
Earlier Last year, the government introduced the OTT tax following President Museveni complaint in 2018 about people who spent too much of their time on WhatsApp and other online applications speaking false allegations against the government.
This saw the bill proposed in parliament and later the law was also quickly passed in May 2019 and came into force in July in time for the start of the financial year.
Since then, the tax has caused an outcry from the majority of locals questioning why the government decided to put up a tax that they know many cannot afford.
The tax requires every single internet and social media user to pay UGX 200 to be in a position to access sites including Whatsapp, Facebook, Messenger among others.
By John Dalton Kigozi