The Uganda government will not scrap or reduce the Sh200 (US$0.05c) daily tax imposed on social media users.

Despite protests, officials insist the tax will help government raise revenue internally rather than having to continue to borrow from international organisations.

The minister of ICT and National Guidance Frank Tumwebaze confirmed the situation and said locals should pay the tax if they want improved services from government.

The government recently decided to reduce mobile money tax from 1% to 0.5% on withdrawals, while senders and those transacting using mobile money will not be charged anything.

Tumwebaze said this is a different approach to the previous directive which was to tax the sender, receiver and those paying for products and services using mobile money.

"So we have agreed not to reduce the social media tax because we want to raise money to grow our economy. Cabinet has agreed to amend the Excise Duty Act 2015 and directed the minister of Finance to prepare an Excise Duty Amendment Bill 2018 to be laid in Parliament. But this is only for the reduction of mobile money tax," said Tumwebaze.

He added that the decision to charge for withdrawals was because the government is trying to encourage the use of mobile money services and move the country closer to a cashless economy.