What is OTT Tax or Social Media Tax. All You Need To Know (FAQ)

All you need to know about Social Media Tax

Well, you have been wondering how the social media tax is going to affect you. How you’ll pay the tax, when and where. In this Q&A, you’ll learn all that you need to know and how the Over The Top services tax is going to affect you. But in summary, the moment you what to use voice and text messaging applications that use internet protocols, you most definitely supposed to pay the OTT Tax regardless if you’re accessing via a WIFI connection or using a VPN.


Social Media Tax – All You Need To Know

The government of Uganda has introduced an OTT TAX  effective  1st  July  2018.  The tax is an excise duty on over the top (“OTT”) services and it  is charged at rate of  UGX  200  per user per day of access. See this article on how to pay your Ott Tax step by step on all notworks.


1)   What are OTT services?

OTT services   to have  been  defined to mean  “the transmission or  receipt of voice or  messages over  the  internet  protocol  network  and  includes  access   to virtual    private  networks”

2)   Which   services are considered by  the   industry    to  be  the   OTT  services   that    should    be taxed?

It  is  the   intention  of   government    that    any   OTT sites   similar  to   the   examples   listed hereunder  are  considered  to be taxable:

Facebook,   Messenger,   Twitter,  Skype,   lnstagram,   Snapchat,  Linkedln,  WhatsApp,  SnapChat.  Here is the complete list by David Okwii.

3)    Is G-mail    and   other    mail  applications     included   as  port   of  taxable    OTT services?

No, Gmail and  other  mail  services are currently  not  considered   as  taxable  OTT services

4)    Are video   streaming    applications    included   as  port   of  taxable    OTT  services?

No,  video   streaming,   such   as  Ugandan   television    and  Kwese’s iflix   are  currently  not  considered   as taxable OTT services

5)   What   are  VPN’s,   and  why   are  these subject    to  OTT TAX?

VPN's are a common global method of accessing internet services while masking the nature of the internet service being used. It is because such VPN's can then be used to access OTT services.. Click To Tweet indirectly  that   government   has  included   such   sites as  being   subject  to  OTT TAX. Unfortunately,   the  creation  of  a  VPN  service  is  relatively   easy,  and   takes   place   outside  of Ugandan   borders.       For   this   reason,  the   operators   will   block    access    to   VPN’s    that    the authorities  declare to be used  For  OTT services,   unless the  consumer  has  paid  their   OTT TAX

6)   Why  do  I  hove   to  pay  the  OTT  TAX?

To  be able  to  use  the  OTT services   such  as WhatApp  you  are  required  to  pay  an  OTT TAX  of UGX 200  per  day.   IF you  don’t  pay  the  tax,  you  will  not  be able  to  use  the  listed OTT services even  though you  may  have  a valid  data   bundle.

7)   Why  must   I  pay  tax before  a government  collection  order  is issued?

We understand     that   a government   collection   order   may  be  backdated  to  the first   of  July.    In the  event,  for  example  that  the  tax  is cancelled    or  reduced,  the  tax  will  be reversed  via  mobile money,   instead  of  passing  it on  to URA.

8)    How  do  I  pay  the  Tax?

You  can  pay  your   OTT TAX  by dialing   *150*3#   or  *165*2#  or  through  My MTN  App.  Payment will  only  be possible  on  Mobile   money.

9)    How  much   do  I  pay?

The  OTT TAX  is UGX 200  per  day  of  Access.  You  can  however  choose  to pay  for  1 day,  7 days or  30 days  of  access.

Please  note that  the  OTT TAX will  expire at  Midnight   (23:59)   on a daily  basis, unless the  proper authorities   direct   that  a day  shall   be defined  as any  24-hour  period.

10) Why  can’t    I  pay  using   the  Airtime  already  loaded on  my  account?

Airtime  has  its  own  set  of  TAX  (VAT  and   EXCISE)   and  in order   to  avoid   unnecessary   double taxation  you  are  required    to pay  your   OTT TAX  only  through  mobile  money

ll) Why has the  OTT  TAX been introduced as a separate charge?

Charging the OTT  excise   duty separately from the  data   bundle  enables  the   consumer   to decide   which   days  they  would like  to access   the  OTT services.

12)  How long does my access last when   I  pay for one day?

When  you  pay  the  OTT TAX,  you  will  be able  to use  OTT services   up  to  Midnight.    If  you  have  a daily  24Hr  data   bundle   that  expires  the  following   day,  you  be required  to pay  the  OTT TAX  for

2 days  to be able  to enjoy   OTT services   on  the  day  of  expiry  of your   bundle.

13)  Do  I have to pay  the  OTT  TAX even if I  have bought a bundle?

Yes,  you  will  be required  to pay  the OTT TAX  even  when  you  have  bought   a bundle   to be able to use  the  OTT  services  above.   You  can  however  use  your   bundle   to access   other   non-OTT services   without  having   to  pay  the  OTT TAX

14)  How can I pay the OTT  TAX for my Dongle/Router,  MiFi?

In order  to  pay  for  your   OTT  TAX  for   your   dongle/MiFi     you  need   to go  onto   Mobile   Money

*165#,   *150*3#   or  MyMTN  APP  and  select   the  option   “pay  for  another”,    insert  the number   of the  Modem or  MIFI  I Router   and  the  OTT TAX  will  come  to life

15)  I browse the internet using my Airtime.    Do  I need to pay the OTT  TAX?

Yes,  the  OTT TAX  is not  related  to  the  way  you  consume the  internet (bundle, pay  as you  go), as soon  as you  access   OTT services  you  will  need to pay  the  OTT TAX

16) Will  I   be charged the 1% Mobile Money tax on the OTT  TAX  transaction?

Yes,   URA has   advised   that    you   will   be   charged  1%  excise    duty    on   the   Mobile  Money transaction to required to  pay  the  OTT TAX.   Hence   you  will  effectively  pay  UGX 202  in  total per  day.

17) Will there be an MTN fee on my  Mobile   Money Transaction to pay  the  OTT  TAX?

No  there is  no additional  MTN fee added to  the  payment  of  the  OTT TAX

18) Will there be an MTN fee if I use my Mobile   Money Transaction to pay the Africell   OTT TAX?

To  reduce inconvenience  to all  network  customers  during    the  implementation  phase,  there will  be no  MTN fee  on  Africell OTT at  the  date  of  launch.

19)  Do  I need to be registered with URA to pay the  OTT  TAX?

No you  do  not  need  to be registered.

20) Will  I   be charged the OTT  TAX  if  I  use  Wi Fi?

Access to  the  OTT services of  all  telecommunications   service   providers  requires you  to  pay your   OTT TAX  for  any  of your   devices or  gadgets accessing OTT.

21) Will my friend or family sharing my Mi-Fi connection   (or device hotspot) be charged the OTT  TAX?

No,   the  URA has  advised   that   the  user   is your   device   or  gadget    that   is  accessing   the  OTT service.    Thus,  allowing  your   friend or  family to connect through  your   device   is not  important for  tax  purposes.

22) Will  I  be charged the  OTT Tax if I use my computer at work (LAN   connection)?

Your   employer   is  responsible    for  the   usage  of   any   telecommunications     services   at   the workplace and  will  have  to  pay  OTT Tax  for  each  of  their   links  or  disable  OTT services at  the workplace.

23) Would    I  have   to  pay  the  OTT  Tax  using   a shared    bundle    with   someone   that   has  already paid   the OTT TAX

All  access   to  the  OTT  services   through   a device I gadget  (using   its  own   SIM card)   requires you  to pay  your   OTT TAX  prior   to usage

24) Can the OTT  TAX be automatically deducted from my Mobile   Money   Account?

You have the option of purchasing  a 1 day,  7 days or 30 days  OTT TAX  pass. There   is no auto-renewal  for  now

25) Can  I  access OTT services while roaming out of the  country?

You  must  pay  OTT TAX  in order   enable   your   data   roaming  service.

26) I’m a postpaid customer what   do  I  do?

As a postpaid  customer, you  will  be responsible  to pay  the  OTT TAX to access   OTT services

27)  My Company buys data for me, what should I  do?

You  will  be responsible  to  pay  the  OTT Tax  to access   OTT services

28) Can I claim the OTT  TAX  back?

No, it is an  EXCISE  DUTY, not  VAT

Source: MTN Uganda.

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Kwehangana Hamza


I am a digital content designer and publisher working with a top digital agency in Kampala, Uganda. I started blogging out of my passion for learning & sharing.

Through this blog, I share tech and digital tips i’ve uncovered and hoping they be of great value to you.