Parliament yesterday imposed a five percent tax on tech giants such as Facebook, Twitter and Netflix as requested by President Museveni.
Other companies affected by the new tax contained in Income Tax Amendment Bill, 2023 include Google, Amazon, and Uber, and any foreign-owned company offering services such as data, online gaming, accessing and downloading of digital content, and data warehousing.
“A tax is imposed on every non-resident person deriving income from providing digital services in Uganda to a customer in Uganda at the rate prescribed in Part IV of the Third Schedule to this Act,” Clause 86 A of the Bill states.
Schedule IV puts the income tax rate at five percent.
“For the purposes of subsection (l), income is derived from providing a digital service in Uganda to a customer in Uganda, if the digital service is delivered over the internet, electronic network or an online platform,” Section 2 of the clause states
Mr Henry Musasizi, the State minister of Finance-in-charge of General Duties, last week revealed that government estimates to collect Shs5b from this tax to contribute to the recently passed Shs52 trillion budget. Government is currently looking for any means possible to widen the tax base to reduce reliance on borrowing.
Parliament first passed the Bill in May, rejecting the tax on the premise that it would negatively affect Internet users.
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