By Mulengera Reporters
Uganda Communications Commission (UCC) Executive Director Hon. Nyombi Thembo has moved to clarify growing social media discussions surrounding a recent UCC report on taxation in Uganda’s Information and Communication Technology (ICT) sector, warning against comparisons that he said take the Commission’s findings out of context.
Thembo said the report was not designed to rank Uganda’s tax burden against that of other countries, but rather to provide evidence to support discussions on measures that could improve digital inclusion, particularly through making entry-level smartphones more affordable.
“There’s been quite a buzz on social media about a recent report from the Uganda Communications Commission regarding taxation in the ICT sector,” Thembo said, acknowledging the public interest generated by the findings.
He explained that UCC’s mandate is primarily regulatory and advisory, rather than fiscal. Under the Uganda Communications Act, the Commission regulates the communications sector and advises Government on policies that can promote the development of ICT, while responsibility for fiscal policy rests with the Ministry of Finance, Planning and Economic Development.
Thembo said the Commission therefore does not determine Uganda’s tax policy but can provide evidence and recommendations to inform Government decisions affecting the communications sector.
Focus on affordable smartphones
According to Thembo, one of the key objectives of the taxation analysis is to strengthen UCC’s case for reducing or potentially eliminating taxes on entry-level smartphones.
He said lowering the cost of basic smartphones would make it easier for more Ugandans to acquire devices and participate in the digital economy.
The Commission is already engaging the Treasury on the issue, he said, with discussions focused on how fiscal measures could support wider digital access without undermining broader national revenue objectives.
Thembo cautioned against interpreting the report through simple international tax comparisons, arguing that such comparisons can overlook differences in the economic and fiscal circumstances of individual countries.
Uganda’s tax base and ICT growth
He noted that Uganda’s tax-to-GDP ratio currently stands at between 13.1 and 13.6 percent, which he described as relatively low compared with several other countries in Sub-Saharan Africa.
The broader challenge, according to Thembo, is how Uganda can expand its national resource base as the economy grows.
He said fast-growing sectors such as ICT will inevitably remain part of discussions around national revenue mobilisation. At the same time, he argued that current tax levels have not reached a point where they are stifling growth in Uganda’s ICT industry.
The UCC boss said the debate should therefore focus on finding a balance between revenue mobilisation and policies that encourage investment, innovation and increased access to digital services.
Tax revenue and Uganda’s digital future
Thembo also urged stakeholders to consider how public revenue contributes to infrastructure and economic programmes that ultimately support digital transformation.
He cited energy infrastructure as one example, particularly given the growing importance of technologies such as artificial intelligence (AI).
Uganda’s ability to benefit from AI and other data-intensive technologies will require substantial investments in data centres and other digital infrastructure, which in turn depend on reliable and adequate electricity supplies.
He argued that investments in energy infrastructure today will be important to Uganda’s ability to harness emerging technologies in the future.
Thembo also pointed to the Parish Development Model (PDM), saying efforts to transition citizens into the money economy can increase household purchasing power and, consequently, their ability to afford digital devices.
More smartphones, better connectivity
Uganda currently has an estimated 20 million smartphone users, according to Thembo, making affordability an important factor in the country’s digital inclusion agenda.
He argued that reducing the cost of entry-level smartphones could increase device ownership and expand the number of people able to access mobile internet and digital services.
An increase in smartphone users could also create greater demand for telecommunications services, encouraging operators to expand their infrastructure.
Greater network usage and investment, he said, could contribute to improved connectivity and potentially help bring down the cost of data services over time.
The UCC Executive Director therefore called for a more nuanced discussion of ICT taxation, emphasizing that the objective should not simply be to compare tax rates but to understand how fiscal policy affects access, investment, infrastructure development and Uganda’s broader digital transformation.
He reiterated that UCC will continue advocating for fiscal measures that support digital inclusion, including possible tax relief on entry-level smartphones, while recognizing the Government’s broader responsibility to mobilise resources for national development.
Thembo urged stakeholders to base discussions on the ICT taxation report on its intended purpose and broader economic context, rather than making direct comparisons that may not accurately reflect its findings.
He said collaboration between UCC, the Treasury, industry stakeholders and other actors will be essential in developing policies that expand digital access while supporting Uganda’s wider economic objectives.
The debate, he noted, ultimately needs to focus on ensuring that more Ugandans can afford and meaningfully use digital technologies, while creating an environment in which the ICT sector can continue investing, expanding infrastructure and contributing to the country’s economic transformation. (For comments on this story, get back to us on 0705579994 [WhatsApp line], 0779411734 & 041 4674611 or email us at mulengeranews@gmail.com).
