Turn social media expenses into savings - URA manager

TECHNOLOGY     TAXATION

KAMPALA - Ugandans have been advised to reduce their presence on social media and instead turn the excise tax of sh200 ($0.052) daily for use of Over-The-Top (OTT) services to access internet into savings.

According to the Uganda Revenue Authority (URA) manager tax compliance division, Kelemensio Busingye, Ugandans spend 90% of their time gossiping on social media.

"No wonder as tax collectors, we put a tax on that. If you reduced your availability on social media, you can save that money. You will be surprised how much it will be at the end of the year," Busingye said.

Addressing participants at Women in Accountancy Forum organized by Certified Public Accountants, Busingye advised women in accountancy to learn to manage their credit score as they grow their finance and investment portfolios.

"Don't make a provision to be a bad debtor. Try to be consistent with your savings habits, set targets, set priorities for these savings and follow them to the later. It all starts with changing our mindsets when it comes to financial empowerment," she counselled.

OTT service includes all applications or Apps that offer voice and messaging services over the internet. Over 50 services including Facebook, Whatsapp, Twitter, SnapChat, Instagram, Skype, LinkedIn will be affected.

At the introduction of OTT, millions of people in Uganda had abandoned social media describing the tax as a punishment.

A daily levy, introduced to tame "idle talk" online and raise revenue, affects more than 60 online platforms including Facebook, WhatsApp, and Twitter. To use such sites, Ugandans are expected to pay a tax of 200 Ugandan shillings (4p) a day.

In the three months following the introduction of the levy, the number of internet subscriptions to such services fell by more than 2.5 million, according to the Uganda Communications Commission. Fears have been raised over the impact on the economy.

At the time the tax was imposed, David Bahati, Uganda's finance minister, said the legislation aimed to raise revenue for public services.

President Yoweri Museveni wrote to the finance ministry urging the introduction of the tax as a way to deal with the consequences of online "gossip".

Ugandans have continued to avoid paying the over the top services (OTT) daily taxes, with Uganda Revenue Authority (URA) collecting a mere sh49.5b out of the projected sh284b in the last financial year.

The levy was controversial from the start, and together with one levied on mobile money inspired some youths to take to the streets to demonstrate against the tax. When the government refused to withdraw the tax, Ugandans found a way around it - using VPNs.