Uganda Revenue Authority (URA) proposes a review of the over the top tax ( OTT).
“We propose for the amendment of Schedule 2 part 1 of the Excise duty Act in respect of the excisable goods and services to provide for mobile data. This could counteract the effects of OTT evasion and will call for consideration to withdraw OTT policy given its rate of evasion and non-performance.” This was a statement in part by Ms Doris Akol the Commissioner General of the Uganda Revenue Authority (URA) while appearing before the Parliamentary committee on Finance to present the Budget Framework Paper for the FY 2020/21.
The Commissioner General told the Committee that it become hard for the commission to realize its projected targets of the taxes largely due to the evasion and non-compliance by the internet users. She noted that some of the internet users had resorted to other alternative means of accessing social media platforms like the virtual private networks (VPN). Ms Doris Akol therefore proposed a policy shift from OTT (social media tax) to directly charge internet data in order to counteract tax evasion.
Hon. Henry Musasizi who is the chair person to the committee directed URA to return along with the Ministry of Finance officials before the committee to make clarification on the policy shift.
Among the other proposals by the Commissioner General to the committee included:
- Amendment of the Tax Procedure Act (that provides for wholesome payment of taxes) to allow for installment payment of taxes over a financial year period. She noted that this would ease tax payments and revenue mobilization.
- Selective provision of incentives to investments whose social and economic benefits are significant. She indicated that this will reduce unnecessary incentives and exemptions since they contribute to narrowing the tax base.
- Lowering of the presumptive tax rates to bring as many small businesses into the tax brackets that can later be upgraded into the higher bands.
- Abolishment of some non-tax charges on some Government services like verifying land titles, renewing passports, driving permits among others.