New study digs into how tax policy shapes telecom sector growth

KAMPALA, December 9, 2025 – The Uganda Communications Commission last week hosted a validation workshop to review findings of a study assessing how the current telecom sub-sector tax regime influences the cost, growth, and usage of communication services in Uganda.

Uganda’s ICT sector has registered steady growth over the years and continues to play a key role in socio-economic development. The telecom sub-sector, in particular, has driven business growth, connected communities, and advanced the country’s digital transformation agenda.

However, despite this progress, many Ugandans remain offline, and sector contribution to the national economy has noticeably slowed in recent years. Previous studies have partly attributed this slowdown to the high tax burden on telecom services and devices.

Currently, the sector is subject to VAT, excise duty on voice and data, and import taxes on devices and network equipment. These taxes increase the cost of accessing telecom services for consumers and may limit investment in network upgrades and expansion.

The commissioned study sought to clearly establish how these taxes affect consumer prices, affordability, service usage, and overall sector growth. It also benchmarked Uganda’s tax framework against neighbouring East African countries while gathering perspectives from key stakeholders, including government agencies, telecom operators, consumers, and industry experts.

Presenting preliminary findings during the validation session held at UCC on Wednesday, December 3, 2025, ECASA Group of Consultants noted that taxes on data, devices, and network infrastructure significantly influence affordability and usage, with rural users most affected.

The workshop brought together government representatives, operators, financial institutions, consumer groups, and researchers to review and enrich the findings. Their input will help refine the recommendations to ensure the final report is robust, evidence-based, and relevant for policy decision-making.

Ultimately, the study aims to guide the development of a balanced tax framework that encourages sector growth, improves affordability, stimulates investment, and ensures sustainable tax revenue for government.