Budget 2021/22: Parliament approves taxes on internet data, fuel

Budget 2021/22: Parliament approves taxes on internet data, fuel

By Norman Isaac Mwambazi

In an effort to fund the proposed Shs44 trillion national budget for the financial year 2021/22, the government is looking for more tax avenues. Some of the proposed taxes have been highly contested in Parliament and by the general public, like the Shs200,000 annual tax for car owners and Shs50,000 for bodaboda riders. These were scrapped after meeting strong opposition.

The Ministry of Finance decided to move the tax to fuel, and this has been approved by Parliament albeit facing some opposition as well. The proposed tax is Shs100 that will be levied on each litre of fuel sold. When this comes into effect after the passing of the 2021/22 national budget, the government anticipates collecting Shs196 billion from this increment. This tax proposal has already sparked off an increase in fuel prices around the country even before it is passed.

The house also approved a 12% excise duty on internet data bundles in the coming financial year. This new tax will replace the Shs200 Over The Top (OTT) tax that was introduced two years ago. According to the tax collecting body Uganda Revenue Authority (URA), the government did not meet the anticipated target through OTT as users found ways of evading it, notably by using Virtual Private Network (VPN) apps to access the rather locked social media sites without paying OTT.

However, in the new proposed tax on internet data, the government said that bundles meant for internet health and education services exempted from the tax. The pressing question though is how internet providers will know what purpose the user is going to use the data for so that health and education services data bundles are not taxed.

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