KAMPALA, Uganda — Uganda could add nearly $4 billion to its economy, create nearly 1.8 million jobs and connect four million new mobile internet users by 2030 by adopting targeted policy changes, including significant tax reform, according to a report released Monday by the GSMA.
The GSMA, which represents mobile operators worldwide, said the massive economic potential is being held back by high taxes and strict regulatory policies that make mobile internet access too expensive for most citizens.
The report, unveiled at the Sheraton Kampala Hotel, highlighted a major digital usage gap in the country. While mobile broadband covers 96 percent of the population, 75 percent of Ugandans fell into the usage gap in 2023, meaning they are covered by the network but do not actively use mobile internet.
Angela Wamola, the head of Africa at the GSMA, said the lack of an affordable device is the primary reason for the digital divide across the continent.
Industry Blames High Taxes
A core focus of the GSMA’s recommended roadmap is lowering the tax burden on the telecom sector. The organization pointed out that Uganda’s mobile telecom sector operates with an Average Effective Tax Rate of 68 percent as a share of pretax profit, significantly higher than the 39 percent rate for the retail finance sector.
To address this, the GSMA urged the government to remove the 12 percent excise levy on mobile services, align mobile money duties and exempt key telecom technology imports from value-added tax. The GSMA estimates these tax changes alone could add 790,000 new mobile internet users.
Other key recommendations include shifting regulatory focus from geographical coverage mandates to population density and lowering taxes on entry-level smartphones to make devices more affordable.
Uganda Ministry Resists Policy Shift
Government officials who attended the report launch praised the country’s existing progress but resisted the GSMA’s regulatory recommendations.
Minister of State for National Guidance Godfrey Kabbyanga said the government is committed to achieving 90 percent broadband coverage nationwide. The Uganda Communications Commission added that the sector already boasts 34.6 million active mobile money subscriptions.
However, Dr. Aminah Zawedde, permanent secretary for the Ministry of ICT and National Guidance, maintained that the government prioritizes geographical coverage over population coverage to ensure that every part of the country benefits.
“The Digital Transformation Roadmap cannot be realized in a population-based coverage policy or at the proposed lower broadband speeds,” Zawedde said. She asserted that the government’s focus is on achieving meaningful connectivity that creates jobs and improves services.
The release of the report highlights the tension between the mobile industry’s push for tax relief to accelerate adoption and the government’s commitment to universal geographical access.
