The parliament in Uganda released a statement last week that a new tax law that imposes a 5% levy on income earned in the country by foreign providers of digital communications services like Twitter and Meta’s Facebook. This is according to a report from Reuters.
Parliament made the news public in a Tweet stating that a new tax law called “The Income Tax (Amendment) Bill, 2023” containing the new levy – the new law “will also tax non-resident providers of digital services in Uganda such as Facebook, Twitter, Amazon, and Netflix.”
A report from KPMG provides a full comprehensive overview on the latest Tax Ammendment Bills and evaluates the implications it will have on different sectors of the economy.
This 5% increase on tax income came after much deliberating over the approval of the new Bills.
The Ugandan minister of finance Henry Musasizi, shared with techfocus24 that parliament will be looking into the income derived from providers of digital communication services.
“We are looking at the income derived by the provider of these services. For Uber, the money goes to California; the man derives income, but pays no taxes. Now we are saying, can we have mechanism of having the taxes?,” Henry said.
Similarly several other countries in East and West Africa have taken the same route. Nigeria, as well as Zimbabwe, Tunisia, Tanzania and Sierra Leone which all have taxes on foreign comapnies, instituted a 6% tax on foreign digital companies in 2021.