PUBLIC STATEMENT ON OTT & MOBILE MONEY TAXES

The ICT Association of Uganda (ICTAU) is gravely concerned about the recently
implemented taxes on Mobile Money and Over-The-Top (OTT) services. These
taxes were enacted by the Government of Uganda without sufficient deliberation
or consultation and are not supported by evidence-based research. They will
undoubtedly constrain the development of our industry, economy, and society.

➢ The flat tax on social media and other common internet services will
disproportionately affect the large number of Ugandans who live in
poverty, further widening the digital divide, while limiting the public’s
ability to access information, communicate and express themselves.

➢ The new taxes on Mobile Money transactions will make these financial
services less accessible to already underserved and vulnerable
populations.

➢ Both taxes increase the cost of doing business in Uganda, and the lack
of a predictable policy development process threatens to make Uganda
a less attractive destination for investment.

➢ Both taxes negatively impact the education sector by increasing the

cost of common activities carried out by students and teachers in
Uganda.

➢ Additional charges added to Mobile Money in particular threaten the

survival of innovative companies in the digital payments space
(commonly referred to as ​fintech),​ and make it more difficult for
innovators to create new solutions within that ecosystem.

➢ Companies and individuals engaged in e-commerce and digital

communication or otherwise conduct business, job searches, etc.
 through social media may be negatively affected by a reduced local
online audience.

➢ The increased cost of using Mobile Money services will encourage

people to revert to cash and the informal economy. This increases risk
and decreases the ability of Government, businesses and individuals to
monitor and account for economic activity.

➢ Many members of the public are still ignorant about these taxes due to
the lack of consultation and sensitization. This may endanger the
reputations and safety of Mobile Money agents who could be perceived
as thieves and liars when trying to implement the new charges.

The ICTAU has resolved to support domestic and international efforts to repeal
these taxes, including the legal petition launched by the Cyber Law Initiative. The
ICTAU also strongly urges the Government to ensure that all future laws and
regulations related to Uganda’s ICT industry originate from a predictable,
deliberate process that incorporates evidence-based research and public
consultation. The ICTAU is also engaging the Ministry of ICT and National
Guidance together with its agencies UCC and NITA-U in order to push for a
sectoral dialogue on this issue and await their response.

We envision an ICT sector in Uganda that nurtures local innovation and welcomes
investment, and therefore we encourage the Government of Uganda to engage
more productively with its citizens to make this right.

Albert Mucunguzi
Chairman, ICTAU