Uganda's state minister of finance for planning says the system will stabilise
Uganda Revenue Authority (URA) collected UGX20.5bn of the expected UGX24.9bn in the first quarter which ended in September.
The country's State Minister of Finance for Planning David Bahati said some people are not paying OTT tax, commonly known as social media tax, but instead using VPN applications to bypass the tax which came into effect on July 1st.
"We have studied and some people are using them to dodge OTT...We are working on it to ensure that it's collected.
"I'm sure that in a few months the system will stabilise and we shall see some growth on OTT tax revenue."
Social media tax allows Ugandans to access social media platforms like Facebook and Twitter by paying a daily tax on UGX200 ($0.05) using Mobile Money services.
The tax was first proposed by President Kaguta Museveni in March as a move to curb lugambo (gossip) and also generate additional revenue for the country.
However, the proposal was seen as a move intended to stifle freedom of expression on social media.
The tax was met with some resistance from Ugandans who went to the streets of Kampala to protest while others used the hashtag #ThisTaxMustGo to express their views on social media.