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Businesses sound alarm at Uganda's 12% internet tax

A new 12% internet data tax will soon to come into effect in Uganda - where consumers are already paying some of the world's highest internet costs - raising fears amongst online retailers over the impact on business. Several have taken to social media sites to voice their alarm.

The tax replaces a social media tax - which an estimated 7.5 million people managed to avoid by using VPN's (Virtual Private Networks).

Ugandan journalist Darren Allan Kyeyune said as this tax is paid at the point of buying data, there isn't really a way round it.

"Online businesses are really, really scared that their markets could shrink... many people are going to affected even if the government says they are excluding provision of medical and education service online."

(Photo: People wait at the mobile phone agent's kiosk in Kampala, Uganda. Credit: AFP)

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