The finance ministry says that it will present the amendment on the excise duty on 19th July, Thursday this week in parliament.
According to Minister of Information Frank Tumwebaze, government has maintained the OTT tax but will reduce the mobile money tax to 0.5%.
“We have been listening to the communication since we passed this law and according to the letter by the president, we have decided to maintain the OTT tax but reduce the mobile money tax to 0.5%,” said Frank Tumwebaze.
Tumwebaze also adds that the 0.5% on mobile money tax will be charged on only withdrawals and not money sent.
“We are only going to tax money that is withdrawn so no more taxing those that are sending the money,” he said.
However, Tumwebaze has promised that government is organizing with telecom companies to find better ways of collecting the social media tax with telecom companies.
Tumwebaze clarified that those who use their mobile phones to pay utility bills and schools fees would not be charged any tax. He also said the Over The Top (OTT) tax, dubbed “social media” tax does not apply to other internet services such as sending emails.
David Bahati, minister of state for finance, planning and economic development who also attended the briefing, said the government is targeting to collect about 32 million U.S. dollars from the 10 million social users in the country annually.
“We want to get more options so that you can pay the social media tax quarterly or annually instead of the daily, weekly and monthly subscriptions,” Bahati said.
Telecommunication companies on July 1 started enforcing the excise duty charge on OTT and the levy on mobile money transactions.