Dear Mr. President,
I trust that you are well.
As you have noted, within a few days of implementing OTT tax and the 1% on Mobile Money, it has caused such an uproar from practically all Ugandans within and outside Uganda. Indeed, this is the first time we are seeing an introduction of tax so unpopular that even the tax administrators (URA), the regulators(UCC) and the implementers( telecom operators) did not know what to do.
Whether parliament reconvenes to discuss this or not, I wish to offer my free advise as follows;
– OTT tax – Mr. President, because you want to limit the amount of alcohol a person consumes, you cannot introduce entrance fees at every bar in town. This is because not every person who enters the bar is a drunkard. Some enter to take a soda or just to watch football. Rather, you introduce a tax on every liter of alcohol sold. This tax increases the cost of alcohol per liter & hence limits consumption.
Similarly on OTT, rather than put the same tax on a person who consumes 200MBs a day and a person who consumes 1GB a day, I suggest you incorporate the tax within the amount of MBs a person consumes with a zero threshold. For purposes of this discussion, you can, for example, say; 1 to 500MBs a day- free (no tax). 501MBs to 1GB a day – Shs200 per day, etc etc. These rates should be incorporated in the cost of MBs at the time of purchase.
–1% tax on receiving, payments and withdraws
Mr. President, as I write this, you know that some telecom companies were already wrongly charging 1% on deposits. That money is still with these telecom companies. This is wrong. Kindly issue a directive to these companies to refund our money. Mr. President, you have clarified that this tax should be 0.5% and not 1%. But the Excise duty amendment act approved by parliament and assented by you says 1%.
In light of the above confusion, I suggest that you use your powers to suspend implementation of this tax until the amendment act is taken back to parliament for reconsideration. Mr. President, kindly have a candid discussion with all stakeholders (Telcom companies, mobile money agents, banks, civil society, farmers, URA, etc. to fully understand the impact of this tax before its implementation.
Mr. President, I hereby submit.
Regards,
Tax Expert
Global Taxation Services Ltd
