In late May 2018, the Uganda parliament passed the Excise Duty (Amendment) Bill that introduced a tax on the use of Over the Top (OTT) Social Media Platforms such as Facebook, Whatsapp and Twitter that offer voice and messaging services. As of July 1st, social media users are required to pay 200 UG shillings a day (approximately $0.05) to access the various OTT platforms available. This translates into $1.5 a month and $19 a year, in a nation where millions live on less than $1 a day.
Is this affordable?
NO. People in the developing world are spending on average considerably more on communications than the five percent of income used as the benchmark by the Broadband Commission for Digital development.
In the book, Information lives of the poor by Laurent Elder, it shows that in developing countries; mobile voice services are regarded more as a luxury good, with expenditures taking up as much as eight percent of household income, rather than the 2.5 percent spent on voice communications in developed countries.
The evidence suggests that the expenditure on broadband data communications is much higher in developing countries. Additionally, with the already exorbitant Internet prices in the region, this move by the government will only keep the offline in continued digital darkness. [ref ]
— Dark Knight Rises (@brian_obilo) July 9, 2018
Why did the government do this?
Many sources indicate that the idea was initially floated in March, when President Yoweri Museveni reportedly wrote a letter complaining to Finance Minister about online gossip and suggesting a tax be introduced to “cope with consequences”.
The government, however, argues that this measure will bring in the much needed revenue to turn Uganda into a middle-income country by 2020. Uganda’s ICT Minister Frank Tumwebaze reiterates that the money raised will be used to “invest in more broadband infrastructure”.
It has to be said that during the 2016 Uganda presidential elections, the internet was largely inaccessible. Social media, including Facebook and Twitter, were inaccessible on voting day. The Government regulator, the Uganda Communications Commission, said the attempted shutdown was for “security” reasons without giving details. President Museveni, on the other hand, insisted at the time that it was done to “stop spreading lies”.
What has the reaction been so far?
According to Oxfam in Uganda, the government would have easily raised more money by simply lifting tax breaks from big businesses and rigidifying laws to stop tax avoidance. Oxfam also warned that the Social Media tax would result in fewer people being able to share their views on important issues. Sophie Kyagulanyi, who currently heads Oxfam Governance and Accountability project, said “It will shrink civic space even further and vulnerable men and women will not be able to access information. They will not be able to question the government or inform their own personal decisions, it is intended to gag us all”
Feminist writer and activist, Edna Ninsiima, also slammed the “insane” tax. “It’s trampling freedom of expression and infringing our rights.” Rosebell Kagumire, a renowned Human Rights Activist and blogger said, ”It’s part of a wider attempt to curtail freedoms of expression.”
Article 29(1)a of the Uganda constitution provides that, everyone shall have the right to freedom of speech and expression which shall include freedom of the press and other media.
Several suits have been filed already challenging the Social Media tax. Raymond Mujuni, a local journalist, is one of the people who filed a petition. His main argument is that the taxation laws, if upheld, would exclude young people’s voices from public discourse online and offline because social media is both a core platform for their expression and what mainstream media journalists turn to, when sourcing from young people. More lawsuits will be filed in the upcoming weeks.
We have filed our suit challenging the #SocialMediaTax. Lawyers are currently serving the attorney general, UCC and URA and actively seeking a date for when the petition can be heard and disposed off.
Our suit raises fundamental disagreement with the tax. pic.twitter.com/YFLyHb06Os
— Mujuni Raymond (@qataharraymond) July 2, 2018
Will the tax impact business enterprises ?
In Uganda, Social Media has widely amplified positive enterprise business outcomes; it has provided an additional avenue to engage with customers and increase overall customer satisfaction and marketing presence. It’s highly likely that many enterprises (especially those that have actively adopted social media) will be negatively impacted by this social media tax.
Uganda is also to impose a 1% tax on cash transfers by mobile phones and other money transfer operators. According to Uganda’s private Daily Monitor newspaper, the new mobile money transfer tax could affect the 8.9 million customers using six mobile phone networks in Uganda.
Mobile money tax a threat to school fees payment solutions: I could give 10 other brilliant innovations in the payments space that are equally affected. What are we doing to the innovation space? #ThisTaxMustGo #MobileMoneyTax https://t.co/2lM1Ysz5wO
— Evelyn Namara (@enamara) July 5, 2018
Will Ugandans comply to the tax?
Many Ugandans feel that the tax is unfair; they see it as a double taxation. Economic experts believe that it may register the highest avoidance rate in Ugandan tax history. Many citizens have turned to Virtual Private Networks(VPNs) to disguise their location to avoid the levy. Although the Finance Minister David Bahati has ordered the communications regulator to stop Ugandans from using VPNs, it’s still unclear how this ridiculous directive will be carried out.
Now that the government of Uganda has effected the #SocialMediaTax, How are you going about it?
— Pollicy (@PollicyOrg) July 2, 2018
What are we doing about it?
Internet Yetu partnered with Digital Grassroots to launch a digital campaign called “STOP UGANDA SOCIAL MEDIA TAX”. The idea is to mobilize as many people as possible against the tax. We will also join forces with renown Ugandan activists and journalists to help ensure the Internet remains free, open and easily available to all.
— Internet Yetu (@InternetYetu) June 14, 2018
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