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September 21, 2021

No More VPNs: Government Scraps Off OTT Effective July 1 2021

 

July 1 2021 will mark the end of paying over the top( OTT)  service and Ugandans will access Internet services and all other social media  with out using encrypted connections such as Virtual Private Networks (VPNs).

The government has abolished the Shs200 per day OTT tax and imposed a 12 percent tax on Internet data in the new financial year, which starts tomorrow.

OTT tax was abolished by the 11th Parliament in the Excise Duty (Amendment) Act, 2021, and replaced with excise duty on Internet data.

State minister for Planning Amos Lugoloobi, while presenting Financial Year 2021/22 budget on June 14, said the excise duty is tailored towards enabling the country attain industrialization for inclusive growth, employment and wealth creation.

OTT or social media tax was first introduced in 2018 and caused a nationwide uproar and protests in Kampala led by then Kyadondo East MP Robert Kyagulanyi, aka Bobi Wine.

Following public uproar, the government proposed to drop the tax, saying Uganda Revenue Authority (URA) failed to hit the tax collection target from OTT. This was after Ugandans resorted to VPNs to bypass the government tax. URA in July 2019 said they had collected only Shs49.5 billion out of the targeted Shs284 billion from OTT for Financial Year 2018/2019, a shortfall of 83 per cent.

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