Over 7.6 Million Mobile internet Users do not pay OTT-UCC Report

It is now clear that at least 7.6 million mobile Internet subscribers do not pay Over the Top (OTT) tax in Uganda.

According to Uganda Communications Commission Market Performance Report for the quarter ended June,one that covers the period between April and June, indicates that out of the 18.9 million mobile Internet subscribers, only 11.3 million paid OTT.

UCC revealed that OTT subscriptions increased by more than 700,000 mobile Internet subscribers, up from 10.6 million in the first quarter to March 2020.

The increase pushed the number of subscribers to 11.3 million, which vividly manifests a clear growth rate of 7 per cent.

Parliament in June 2018, introduced a Shs200 tax levy on all telecom subscribers accessing social media sites such as Facebook, Twitter, Whatsapp, Skype, and Viber, among others.

This contraversial move followed a directive from President Museveni to Finance minister Matia Kasaija, to widen the tax revenue base, noting that social media platforms were being used for propagating falsehoods.

What beats one’s understanding is how the 7.6 million people access tax-restricted social media apps, could all them be using Vitual Private Networks(VPN) instead of OTT?well,this still remains a top secret only to that above percentage of people.

Kampala Sqoop understands that some people who don’t subcribe to VPN,use Wi-Fi networks to avoid paying for OTT and do it only daily basis.

Uganda Revenue Authority (URA) in it’s July-September performance report, said it had registered a surplus in its OTT collections, which the experts predict could have been highly been influenced by the rising subscriber numbers.

From that period, URA said OTT had registered a surplus of Shs8.27b aimed at financing the Country’s economic activities including Agriculture, Education and Health among others.

URA does not give a consolidated figure of how much was collected during the period from July to September but notes the surplus could be “explained by increased transactions via mobile phones through voice and text owing to limited movement of people amid Covid-19, However,It is not clear how much URA will be seeking to collect from OTT in the 2020/21 financial year.

However, in July 2019, URA reported a collection of Shs49.5b against a targeted Shs284b, which indicated an unusually huge shortfall.

Government had hoped to generate between shs400b from OTT or social media tax annually, however, the tax was met with stiff resistance from politicians and citizens with claims that it’s actually meant to violate People’s rights and keep Museveni in power for long.

According the UCC report, there has been an increase in OTT subscribers with the figure growing overtime.

For instance, in the 2019 third quarter from July to September, subscribers grew to 9.36 million, before growing to 10.6 million in the last quarter of 2019 from September to December.

OTT remains a controversial tax that many experts say is an impediment to growth of digital technology and access to information.

Government had hoped to generate between Shs400b from OTT or social media tax annually, however, the tax was met with stiff resistance from politicians and citizens.

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