No more free rides: Time for multinational companies to pay their fair share of tax

Imagine if the biggest players in your favorite apps like Google, Netflix, X (formerly Twitter), Airbnb, and Spotify were all pitching in to build schools and improve roads. Sounds great, right? But what if I told you they could if they paid their fair share of taxes? Currently, they do not; instead, this burden is pushed onto us. Let’s dive into it.

Traditionally, a country's right to tax foreign companies conducting activity within its borders has been based on their physical presence. Implying that companies can operate and generate profits in jurisdictions with limited or no physical presence without creating a taxable presence. While we’re here hustling to make ends meet, these companies are dodging their fair share of taxes by shifting profits to low-tax havens. It’s not just about numbers on a balance sheet; it’s about real-life consequences for young Ugandans like you, who deserve better public services.

Think about it: every time you scroll through TikTok or use Netflix or Uber, these companies get revenue, and yet a bit of that money should pay our government tax so as to build schools, hospitals, and roads we all rely on. Instead, these companies are exploiting loopholes and tax havens, leaving governments scrambling to fill the gap by pushing such tax burdens on us. The government of Uganda from 2023/24 committed to collecting a 5 percent digital service tax off revenue generated by every multinational company with no physical presence in its jurisdiction. Uganda has faced challenges in collecting this tax. If there is no international commitment to it, Uganda will never be able to get its fair share of revenue as long as this issue is not fixed at an international level.

As young people, we must get involved in this fight. One powerful way is to push for Uganda’s active involvement in the ongoing UN Tax Convention discussions. Luckily, Uganda has voted yes for a UN Convention on Tax Matters and now must step up its advocacy, especially as chair of the G77+ China, to ensure the Framework Convention adequately covers digital tax and curbing illicit financial flows. These global talks are critical for creating fairer tax rules that can hold multinational companies accountable and prevent them from dodging their responsibilities. With a strong UN Tax Conversion, Uganda could tax these companies properly, bringing in money to finance our public services and curb illicit financial flows.

As research from the Initiative for Social and Economic Rights (ISER) has shown, we lose so much money—more than we get in, for instance, overseeing development assistance (ODA), which could get us off dependency on donors. We are missing out on revenue that would, for example, deploy medical interns in hospitals or compensate victims of the Kiteezi land-fill collapse. It could contribute to funding the national budget, especially amidst rising debt.

Imagine a situation where your friend consistently avoids paying their fair share of the bill each time you go out to eat but on a much larger scale. If we don’t demand that Uganda plays an active role in these discussions, we risk facing an even heavier tax burden ourselves. Let’s not be the ones left footing the bill while these companies skip out on what they owe.

So, let’s make our voices heard, rally for transparency, and advocate for policies that ensure these companies contribute their fair share. Stay informed and speak up. Follow the discussions, join youth advocacy groups, and use social media to spread the word. 

Engage with policymakers and demand that they prioritize Uganda’s participation in these crucial negotiations. Remember, change starts with us taking collective action and making our demands clear. It’s time to turn all those tweets and posts into real action and make some noise for real change! Our future is at stake. Nicter Kaweesi, Volunteer at the Initiative for Social and Economic Rights