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OTT Tax: Facebook denies holding back Uganda investments

Uganda , 10 Aug 2018

OTT Tax: Facebook denies holding back Uganda investments

Facebook has refuted media reports claiming it is freezing its investments in Uganda in response to the government's social media tax.

Authorities imposed the tax under the revised Excise Duty (Amendment) Bill 2018, effective in July 2018.

Regional media reported that Facebook's head of African public policy Kojo Boakye told the Ugandan Communications Commission (UCC) that the company would stop further investment in the country because of the negative impact of the tax on its business model.

Reports also specified that the social network would put a stop to major tech projects in Uganda, including the US$170 million 770km fibre collaboration understood to involve BCS and Airtel.

However, a spokesperson for Facebook denied the reports. "Facebook is committed to Africa and our current connectivity work in Uganda, including the 770km fibre build."

The social network confirmed that it is maintaining open and active lines of communication with the Ugandan government, the private sector and members of civil society.

Despite opposition led by tech operators and youth groups, the government has refused to back down on the OTT tax.

In July 2018, Frank Tumwebaze, Uganda's Minister of Information, confirmed this position and added that the government was willing to reduce tax slammed on mobile money transactions from 1% to 0.5%.

David Bahati, Uganda's Minister of State for Finance, Planning and Economic Development added that plans are underway to enable internet subscribers to make quarterly and annual payments.

According to Bahati, the goal is to generate US$32 million annually from Uganda's 10 million social media users.

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