Uganda’s government has announced that the social media and mobile money taxes will be reviewed.
The 200-shilling ($0.05; £0.04) tax on the daily use of apps like Twitter and Facebook has led to protests in the country.
The taxes took effect at the beginning of July.
A small demonstration in the capital, Kampala, was broken up by police on Wednesday morning.
Ruhakana Rugunda said:
Government is now reviewing the taxes taking into consideration the concerns of the public and its implications on the budget.
The president has provided guidance on the matter and encouraged further discussion with a view to reaching consensus on how we should raise the much needed revenue to finance our budget.”
A revised budget is due to be tabled in parliament on Thursday 19 July.
Parliament approved the tax in May after President Yoweri Museveni had pushed for the changes, saying that social media encouraged gossip.
But some argued that it was a way of restricting critical comments about the government.