Govt To Get 5BN From New Tax On Facebook, Twitter Minister.

Government projects to collect Shs5b annually introducing 5% income tax on Facebook, Twitter, Netflix, and other digital companies.

Today the Ministry of Finance vehemently defended its plans to slap 5% income tax on non-resident digital companies offering digital services in Uganda.

The minister of state for finance Henry Musasizi today appeared before the parliamentary committee of finance and proposed a 5% tax on digital companies owned by foreigners. The proposal contained in Clause 16 of the Income Tax (Amendment) Bill, 2023 resurfaced on Thursday last week after President Museveni returned the Bill and he, among other things, demanded that Parliament revisit its initial position that had thrown the same proposal.

Among the companies that the government targets to scoop said taxes from include Facebook, Twitter, Google, Netflix, and Amazon, all of which offer paid-for services in Uganda. In submissions made before the committee by the State Minister for Finance in charge of General Duties Henry Musasizi, legislators were informed that the government taxman, Uganda Revenue Authority (URA) hopes to collect Shs5 Billion from foreign-owned digital companies.

The reinstatement of the 5 percent tax proposal comes after President Museveni in a letter read to Parliament on Thursday last week by Speaker Anita Among demanded that the proposal be returned. Legislators believe that the Ministry of Finance failed to make a strong case before Parliament when the tax was presented to the House for the first time.

Musasizi also defended a proposal by the government to limit the tax losses available fo carry forward by a taxpayer to five years. After the capping point, taxpayers will only utilize 50 percent of the assessed tax losses in the subsequent years of income. The government says the limit will avoid circumstances under which some companies overclaim losses and thus enable them to remain in an artificial tax-loss-making position.