Parliament has this evening passed the Excise Duty Act 2014, endorsing new taxes on both social media and 1% tax on all mobile money transactions.
This was after the MPs approved the report by Finance Committee of Parliament that recommended to have the taxes imposed.
Government through the Ministry of Finance tabled a proposal before Parliament to impose a new tax on telecommunications service operators providing data for accessing over the top services to account and pay excise duty on access of Over The Top Services (OTT).
In the proposed amendment, social media users are to pay Shs200 daily with Government projecting to collect Shs284Bn and Government said that whereas the telephone users are paying taxes through voice calls and texts, the social media users through Whats App, Skype, are using the same services, yet they aren’t paying taxes.
In their report, the termed the current trend as unfair and inequitable for consumers who buy airtime and use it to make voice calls compared to those who buy internet data and make voice calls.
There was a back and forth debate over the matter with MPs divided over the matter where the Opposition MPs deemed the tax proposal as double payment, while their counterparts the NRM supported the move saying social media tax is aimed at broadening the tax base.
Although Government had proposed exemption on excise duty have an exception on research and education, the Committee rejected this, arguing that it won’t be easy to know which of the users is using social media for both research and education or those using it for leisure.
Government had also proposed to introduce 1% excise duty tax on the value of mobile money transactions of receiving, payments and withdraws and Shs115Bn is expected to be collected from this new tax policy.
The Committee yet again supported the proposal on ground that money has migrated from the traditional payment systems like banks to the digital platforms and there is need for the tax man to reach that same platform.
The Committee report highlighted that using mobile money is a choice as there are other methods of payment which are already attracting taxes.
A section of MPs opposed the new tax saying it is intended to strangle the poor Ugandans, yet another group fired back saying the poor people also demand for services and these shouldn’t be exempted from paying taxes just because they are poor.
At the time of the voting, there were mixed voices on the matter and the division was witnessed during the voting where those opposed were in equal number with those seconding the move.
Deputy Speaker, Jacob Oulanyah later announced that those in support of the proposals had taken the day.