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June 19, 2021

National Budget 2021/2022: Goverment Unveils New Taxes On Data, Airtime And Plastics

National Budget 2021/2022: Goverment Unveils New Taxes On Data, Airtime And Plastics


The government has announced a new excise duty tax on airtime and mobile data, as part of the new measures to broaden the tax base to shoulder the Shs 44.7Trillion for the FY2021/22.

The government is hoping to raise up to Shs 22.4Trillion domestically, of which Shs. 20.8 Trillion tax revenue and Shs 1.5Trillion will be Non-Tax Revenue.

Minister of State for Planning Hon Amos Lugoloobi while presenting this year’s budget before parliament, revealed that the government had decided to phase out the excise duty on Over the Top (OTT) and introduce a new tax on airtime and data instead.
Earlier during the budget preparations in parliament, the Finance Ministry revealed that the OTT tax also known as social media tax, had proved ineffective because most Ugandans were evading it by using VPNs.

As such, he said, the government had decided to introduce a “harmonized excise duty rate of 12.0% on airtime, value-added services and The government has also introduced an export levy of 7% on the value of fish maw exports.

This follows a deal reached between the governments of Uganda and China for the latter to directly import fish maws from Uganda through the Directorate of Fisheries under the Ministry of Agriculture Animal Industry and Fisheries.

Fish maw is a white hard membrane found inside the body of the Nile Perch. The maw costs between USD 450 (1.6 million Shillings) to 1,000 (3.6 million Shillings) on the international market.
The fish maw is used to among other functions make surgical threads, plane parts, drugs and also used as food in different Asian countries. About 3,882 metric tons of fish product is exported to different countries across the world annually. Uganda has only been exporting the product to China through other Asian countries.

President Yoweri Museveni revealed recently that experts have had given him a plan to generate more revenue from fish maw than oil.

Meanwhile, another export tax of 5% and 10% on processed and unprocessed gold and other minerals respectively has been introduced.
The government has also decided to broaden the scope of taxation of plastics to cover all plastics

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