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New 12% Internet tax Becomes Operational Today as OTT is Abolished


By Rogers Wanambwa 

KIU, Main Campus – The 12% internet tax proposed by the Ministry of Finance and Planning to replace the Over The Top (OTT) tax on social media usage takes effect today, July 1.

The Ministry of Finance proposed a 12% internet tax levy under the Amendment Bill 2021, where excise duty on internet usage was adopted as a means of increasing revenues through imposing an unavoidable tax, as opposed to OTT which Ugandans bypassed by using Virtual Protected Networks (VPNs).

However, the 12% tax will be excepted when buying internet data for medical and education services.

The State Minister for Planning Amos Lugoloobi disclosed a harmonized excise duty rate of 12% on airtime, value-added services, and internet data as an alternative for OTT while reading the 2021/22 budget at Kololo Independence grounds.

Over 7.5 million internet users evaded the OTT tax and instead opted for VPNs, according to the Uganda Communications Commission (UCC), which was below the tax compliance goal of over 21 million internet users in Uganda. 

Despite the removal of tax on social media usage, Ugandans who intend to access the networking site Facebook will still need to use VPNs, as President Yoweri Museveni banned the social media site in Uganda.