Dear Mr. President my 2cents on #OTT & #SocialMediaTax in Uganda

Dear Mr. President,

Your statement on reactions from OTT and Social Media Tax has been well received.  you do mention quite a number of things regarding why Uganda’s GDP tax ratio is so low (14.2%) – Very solid issues you raise.

Your Excellency Sir,
It is the sole duty of the tax collecting body URA, to collect taxes and penalize telephone companies that under declare their revenues once there is proof that they have done so (which I’m sure there is).

The reason why we have real estate owners🏡 evading tax is because the system has been corrupt for long. We have landlords putting up offices disguised as residential estates and the same tax collectors are taking kickbacks from them to buy their silence. And because some of these tax collectors have mastered the art of system manipulation it is difficult to notice their misdeeds because it is institutional corruption. The same goes for the under under declaration of goods at entry points(border). Right from the port of Mombasa in Kenya, some containers headed to UGANDA have been seized for false declaration especially luxury cars making their way into Uganda. However, Your Excellency, if followed up , when these containers make it to UGANDA, when they do, some of these luxury vehicles (declared as agricultural fertilizer at the border and let through without scanning) costing billions of UGANDA shillings are driven by some government officials and their families! As civil servants, where do they get money to buy 2018 top of the range model vehicles? Again they too have mastered the art of system manipulation.

Your Excellency Sir,
it is also important to note that our wage bill is too high and eating up a large amount of tax payers money and if Europe is the comparison we are going to use, then we are in a pretty bad place.

Mr. President,
we have too many cabinet ministers and ministers of state, Members of Parliament, woman representatives(also MPs), Resident District Commissioners (RDCs), Chief Administrative Officers(CAOs), Local Council chairpersons(LCs1-5). we also have tens of Presidential Advisors. Each of these positions sir demand an unmanageable monthly salary that is unsustainable for a country who’s larger population is living in poverty.
The government expenditure on salaries alone definitely eats up a large chunk of tax payers money. If scaled down this could save us billions if not trillions of shillings on a monthly basis!

Your Excellency,
Onto the Mobile Money Tax, at 1% it is discouraging especially for small businesses (juakali informal sector) to operate while paying these taxes for every transaction made on their mobile money. Seeing as most of them are Micro Small Enterprise businesses (MSEs), When will they grow into SMEs or beyond? Financial inclusion should be for all and not a particular target of the population. These taxes are retrogressive in a sense that it will be difficult to track small businesses earnings if they continue with cash transactions. This tax is pushing them away and in turn making it difficult for Uganda Revenue Authority to track their progress. If the government can put a cap on the amount to be taxed this will help a great deal e.g transactions from UGX 2 Million shillings. Telecoms should design the systems to indicate the source of the funds (salary, savings etc) and purpose of the funds (rent, school fees, medical bills, wages etc) so this can generate financial statements on general breakdown of these transactions.

Finally, and most importantly your excellency,
the social media tax is not necessary. Each time any Ugandan buys data bundles they indirectly pay taxes, and the same goes for when they buy airtime. Having this extra charge to access social media not only hurts the pockets of youthful Ugandans trying to make a living from technologically developed opportunities but also reduces the innovative spirit of the young population who have since learned to generate income by becoming social media executives for corporate institutions and well established businesses. Let’s also not forget that these social media platforms have reduced the unemployment rate by a small percentage Through outsourcing labour. Some young Ugandans have been employed by global companies through these very social media platforms and are diligently paying taxes.

These Ugandans, Your Excellency, are more in number compared to the rumour mongers and liars targeted with this tax. Access to social media has exposed many youthful Ugandans to globalization and challenged them to compete at global and not local level. In any case, social media companies such as Facebook, Instagram, WhatsApp, LinkedIn and Twitter as well as YouTube should be the ones taxed as the Ugandan population is generating content for them and your administration has not demanded your cut from all the creativity and innovation the population you lead is generating. Europe has done so and that’s the reason Mark Zuckerberg can be summoned to explain things like Cambridge Analytica’s manipulation of Facebook data and the like. Let me also add that Social Media allows businesses to market their product offering affordably and sometimes freely, a service no newspaper/TV/radio station or billboard will offer without heavy monetary demands.

With these small views of mine, I thank you
For God and my country

One thought on “Dear Mr. President my 2cents on #OTT & #SocialMediaTax in Uganda

  1. Biira has said it very well.let me hope that the president will find time to read thru and understand.possibly it will help him take better decisions that will not hurt the poor Ugandans.
    1.wage bill
    2.number of liars vs benefiariesof socal media
    3.Online marketing make easy.
    4.Youth exposure.
    Some of the points mentiond dor the President to note.

    Like

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