Shs700 Million Generated from Facebook Users in Uganda

Shs700 Million Generated from Facebook Users in Uganda
  • Earmarking Facebook among other digital platforms subject to tax in Uganda is fast yielding a positive result for the East African country

A few weeks after its move to capture Facebook users in Uganda into its tax net, the Uganda Revenue Authority, URA has raked in a whopping Shs700 million in Value Added Tax, VAT from users of the Facebook platforms in Uganda.

Although the Facebook platform is currently locked to the public in Uganda since 2021 except for users that access the platform through a Virtual  Private Network, VPN, the country was able to rake in the amount of VAT as the platform still boasts the highest number of users at 2.5 million as of 2022, according to data published in Meta’s advertising resources from 

It is important to say that government agencies, individuals and companies also partake in the use of VPN to access the platform.

Shs700 Million Generated from Facebook Users in Uganda: More Projections

Regardless of the impressive run recorded in the previous year, the URA projects that the platform is capable of generating at least Shs5b in taxes from this measure of capturing digital platforms into the tax net.

The URA also envisages that the eventual opening of the platform to the public will open it up to generating more revenue for the URA.

The Trajectory

Below are the highlights of events that lead to the final implementation of taxes on digital platforms like Facebook in Uganda.

  • Recall that late last year, the URA revealed the use of platforms like Netflix and other online platforms such as Amazon and Google will attract electronic payments on online advertisements and meetings like on Zoom. Recall that meetings online became popular on the outbreak of Covid-19 in 2021 where organisations had to work remotely due to the restriction of movement to curb the spread of the virus.
  • Recall also that in June 2022, URA, in a published statement, said it had made a decision to start collecting tax from non-resident electronic services provider companies operating in the Ugandan economy, effective July 1, 2022. 
  • It was after this directive that Facebook decides to announce in October that its platform will be subject to VAT at 18 percent which is Uganda’s local rate.
  • Fast forward to January 2023, the URA issued an earlier public notice notifying all non-resident suppliers of electronic services to collect, file and pay tax.

Some of the services mentioned by URA include; websites, web- hosting or remote maintenance of programs and equipment, supply of software, software updates, online advertising, online music streaming, and movie streaming services.

Other services include scientific, other broadcasts, events including television, supply of images, text and information, access to databases, self-education packages, music, films and games of chance, political, cultural, artistic, and sporting.

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