The World Bank has called for the scrapping of over-the-top tax-OTT in Uganda, saying that it could boost access to coronavirus prevention messages for the vulnerable populations. This is the first time the organization, also a big lender to government, is openly calling for the abolition of the tax.
The World Bank says in its Uganda economic update 2020 report that the tax has not achieved its intended objective because the tax is difficult to collect and easy to bypass by more users.
It adds that the social media tax is instead reducing the proportion of internet users and widening digital and income inequality and should be re-evaluated.
In 2018, the government imposed a 200 shillings daily tax on using social media.
The tax was expected to raise at least 284 billion shillings in 2018/19 financial year. The government was only able to collect 49.5 billion shillings of that, with majority Ugandans preferring to use Virtual Private Networks (VPN) to bypass the tax.