Telecom companies in Uganda have begun removing the infamous Over-the-Top (OTT) tax as advised by the government in preparation for the introduction of a 12% excise duty on internet services.
The Parliament of Uganda recently passed the Excise Duty (Amendment) Act, 2021 (‘the Act’) which imposes an excise duty of 12% of prices charged for Internet data except Internet services used for medical or educational purposes. The excise duty is collectable effective 1st July 2021.
With only two weeks to this new tax, Ugandans can enjoy the freedom for the meantime as Liquid Telecom, Airtel Uganda and MTN Uganda among others have all scrapped the OTT tax.
Initially, many critics predicted that the controversial OTT services tax was bound to fail, given the widespread opposition it has gathered since being instituted. With so many organisations, citizens and agencies calling for its cancellation. Nevertheless, the government continued with it.
A Market Performance Report issued by the Uganda Communications Commission indicated that the number of internet subscribers not paying the tax was at least 7.6 million of the targeted 18.9 million subscribers, its from this that a proposal to revoke the OTT tax was chaired. The report further showed that subscribers bypass the tax using VPNs or utilizing Wi-Fi which is not subjected to the tax.