The government has been advised to explore the possibility of taxing online advertising and content promoters instead of imposing a tax on internet data bundles.
Early this month, Finance Minister Matia Kasaija announced twelve new measures through which the government intends to increase its revenue collections in the financial year 2012/22. One of the measures is the introduction of a 12 per cent tax on the internet.
However, Unwanted Witness Uganda, a civil society organization that advocates for internet freedoms, cautions that the proposal will instead raise the cost of the internet, and limit its usage amongst Ugandans.
Dorothy Mukasa, the Chief Executive Officer at Unwanted Witness Uganda explains that raising the cost of the internet through an additional tax is a slap in the face of digital innovators who can potentially create more revenue sources through creating employment.
She advises that the government undertakes interventions aimed at increasing internet utilization in the country, through boosting its speed and improving connectivity. As a result, she adds, the government will release more revenues through the already existing initiatives.
As an alternative to taxation, Mukasa has advised the government to explore options of taxing online advertisers and international corporations operating on the internet, whom she says are earning colossal sums of money from their subscribers including Ugandans.
Livingstone Muweesi, an online car broker in Masaka also argues that the government should instead cut down the cost of the internet which he says complements many other sources of revenue. He says that if adopted, the proposed tax will have a negative impact on many other businesses platforms that operate online.
“The Internet has simplified the way we do business, and we pay taxes on everything on everything that is imported. Actually, the government ought to find ways of supporting internet users instead of taxing them further,” he noted.
Meanwhile, the Speaker of Parliament referred the entire tax proposal to the Committee on Finance, from where it is being considered before the completing budgeting process is completed before May.