Bill passed to tax foreign digital companies

The Parliament of Uganda has passed a new Bill that imposes a 5% tax on the income earned in the country by foreign digital companies such as Facebook and Twitter. Other companies affected by the new tax in the Income Tax Amendment Bill include Google, Amazon and Uber, and any foreign-owned company offering services such as data, online gaming, accessing and downloading of digital content, and data warehousing, the East African reports. Some legislators criticised the Bill, saying it might lead to an increase in the prices of internet services and gag social media users. However, the parliamentary Finance Committee insisted that the Bill ‘is not a social media tax and will not affect an ordinary Ugandan in any way,’ according to a statement. Parliament first passed the proposed law in May, but rejected the social media tax on the premise that it would negatively affect Internet users. President Yoweri Museveni, however, in a letter read to the House on 29 June, disagreed with the legislators’ reasoning and thus declined to assent to the Bill, recommitting the clause. ‘Since it does not relate to residents in Uganda as was mistakenly in the minority report, it should be reinstated. The tax will be borne by the digital companies,’ the President said. In its report presented to the House last week, the committee agreed with Museveni.

Full report in The East African