KAMPALA - Uganda's parliament late on Tuesday passed a new tax law that imposes a 5% levy on income earned in the country by foreign providers of digital communications services such as Twitter and Meta's Facebook.
Authorities in the east African country have been exploring ways of tapping into the fast-expanding digital economy to help boost revenue needed to pay off mounting public debt.
The Ugandan parliament said in a Twitter post that lawmakers had passed a new tax law called "The Income Tax (Amendment) Bill, 2023" containing the new levy.
The new law "will also tax non-resident providers of digital services in Uganda such as Facebook, Twitter, Amazon, Netflix," the parliament said.
The bill has prompted alarm in some quarters, with critics, including opposition lawmakers and rights advocates, warning it could see social media firms seek ways to charge Ugandans for services that are currently free.
They have argued the levy is a means to limit access to social media and stifle free speech for a government hostile to such platforms.
President Yoweri Museveni, in power since 1986, has criticised social media in the past saying it was mostly used for rumour-mongering.
However parliament said it "was not a social media tax and would not affect an ordinary Ugandan in any way".
(Reporting by Elias Biryabarema; Editing by Bhargav Acharya and Emma Rumney)