A substantial number of Ugandans on the internet have refused to or withdrawn from paying Over the top (OTT) or social media and mobile money taxes which were introduced at the beginning of the 2018/19 financial year, a ‘third-quarter communication industry report’ indicates has revealed.
According to the report, when a daily OTT tax of Shs200 per sim card was introduced in July 2018, over 8 million people paid the tax, but this number, in August, reduced by 1.2 million people to about 6.9 million then to about 6.8 in September.
The decline in the number of OTT taxpayers also meant a drop in the revenue collected. The report shows that the government collected over Shs4 billion in August of 2018 but the figure dropped to 3.9 billion in September. In July, over 5 billion had been collected.
In the last three months of the quarter under review, both the number of OTT taxpayers and figures for OTT revenues declined. 50.4 percent of the internet subscribers used OTT services by the end of September 2018.
According to UCC, 50.4 percent of the internet subscribers used OTT services by the end of September 2018.
The report shows that the Uganda internet market is dominated by mobile internet compared to fixed internet, with mobile internet subscription standing at about 13.6 million up from about 9.9 million reflecting a growth of 38 percent. According to the report, Internet penetration now stands at 35 percent.
Internet subscriptions
The Uganda internet market is dominated by mobile internet compared to fixed internet. The mobile internet subscription now stands at 13.6 million up from 9,855,034 reflecting a growth of 38 percent. Internet penetration now stands at 35 percent.
Mobile money
Regarding mobile money transactions, while the amount of money deposited in digital wallets has grown, people have reduced on the number of transactions they make. The behavior has been brought about by the introduction of 0.5 percent mobile money tax on withdraw of money.
The report shows people still prefer mobile money for deposits since they are not charged for keeping their money with mobile network operator like it is in banks. But they’ve reduced on the number of transactions in order to avoid paying more taxes.
According to the report, the value of mobile money transactions significantly dropped from Shs19.3 billion in the second quarter of 2018 before the introduction of mobile money tax to Shs14.8 billion after introducing the tax in the third quarter. Authorities had earlier registered Shs18.1 billion in the fourth quarter of 2017, then Shs18.8 billion in the first quarter of 2018.