URA Doris Akol OTT revenue
URA pinpoints the continued use of VPN as a big contributor to low OTT tax

Uganda Revenue Authority (URA) pinpoints the continued use of VPN as a big contributor to low OTT tax

Uganda Revenue Authority has highlighted the increased use of WiFi and VPNs as a big factor contributing to the low taxes collected from OTT.

Virtual Private Network (VPN) is a service that makes Internet connection more secure and also helps accesses to get around blocks and access censored sites.

“The story of OTT is very different. It was projected at Shs. 284 billion but we only collected Shs. 49.5 billion,” the URA commissioner general, Doris Akol stated.

About URA’s report of the financial year that concluded on 30th June, a shortfall of more than 80% in collections of Over The Top (OTT) tax was pinpointed.

In an amendment of the Excise Duty (Amendment) Bill of 2018, Parliament introduced a special tax on social media platforms such as Facebook, Instagram, Twitter, WhatsApp among others which required each Ugandan accessing the internet to pay a certain fee to use these sites.

Notably, shs 200 daily or shs 1400 weekly and shs 6000 monthly is the fee charged for anyone accessing these social media sites.

Under this, it was projected that at the end of each financial year, shs 284 billion would be collected from social media accesses, however, URA noted that it has only collected Shs. 49.5 billion which represents only 17.4% of internet subscribers.

READ  UCC issues a 2- month ultimatum to film industry stakeholders to ensure they meet legal standards

According to the URA commissioner general, Doris Akol this loss is attributed to the persistent use of wifi and Virtual Private Networks (VPN) as opposed to paying the tax.

“The story of OTT is very different. It was projected at Shs. 284 billion but we only collected Shs. 49.5 billion. OTT did not perform well at all and we think it was affected by the use of Wifi and the continued use of VPNs to avoid paying taxes,” said Akol.

Earlier, the Uganda Communication Commission (UCC), stressed that it was doing all it could to ensure blockage of VPNs in a bid to reduce tax invasion by social media users.

But up to now, nothing has been done and as a result, even the few Ugandans who were paying this relatively small fee have resorted to applying VPNs to save themselves from the tax burden.

By John Dalton Kigozi