Pressure is mounting on the Ugandan government to reduce taxes on internet and internet-enabled devices, including smartphones, ahead of the proposed 2023/ 2024 national budget.

Uganda’s proposed national budget for the 2023/2024 financial year comes into effect in July this year.

But a consortium of ten civil society organisations, acting under the auspices of The East African Budget Network, wants internet levies and taxes to be reviewed and levelled with that of neighbouring countries.

Consortium coordinator Julius Kapwepwe said the internet is an enabler and amplifier of business transactions, communication and e-government services in the digital world and that the country cannot stifle any enabler in the name of taxes.

Kapwepwe said with the current taxes applied to the internet and devices, it will be difficult for Uganda to achieve its 2040 vision to achieve universal inclusion, sustainable development, economic progress and poverty eradication through digital innovation.

In 2021, the Uganda government imposed a 12% tax on the internet and has maintained other taxes, including the 18% value added tax (VAT) and 10% duty on imported devices.

Kapwepwe said, “Taxes on the internet and smartphones translates into rolling back financial deepening, agency banking prospects and access to information and other services. We can avoid the temptation of rolling back the impressive digitalisation gains the country has made.”

Jane Nalunga, executive director at the Southern and Eastern Africa Trade Information and Negotiation Institute (SEATIN) said it is time for the government to repeal the tax on the internet as well as reduce or rescind tax on internet-enabled devices to hasten the realisation of digital economy.

Nalunga was quoted by the local Independent newspaper as saying, “Imposing taxes on internet and internet-enabled devices such as smartphones contradicts the government’s initiative of digitalising the economy. If more people can access smartphones and use them to boost communication and access to information, the government can still be able to recoup those taxes via numerous taxes such as VAT.”