The government of Uganda has Sunday July 1 started effecting the recently proposed social media tax, where subscribers are required to pay a daily fee of Shs 200 to tax body Uganda Revenue Authority (URA), before accessing their social media networks.
The proposal to have these taxes levied was first raised by President Yoweri Museveni in March this year.
Museveni in his March 12 letter to the Minister of Finance, Matia Kasaija, as a deliberate move to stop what the President called Lugambo (gossip), but also increase government revenue.
“I am not going to propose a tax on internet use for educational, research or reference purposes, these must remain free. However, olugambo on social media (prejudices, insults, friendly chats) and advertisements by Google, and I do not know who else, must pay tax because we need resources to cope with the consequences of their lugambo,” Mr Museveni explained in a letter.
It is anticipated that government will collect between Shs 400 billion and Shs 1.4 trillion annually from social media users and the President who blamed Finance Minister Kasaija for “lack of seriousness” in identifying sources, was optimistic about increase in the local revenue collection. His letter expressed strong concern over the “scandalous” concealment and under declaration of tax in some sectors including telecos.
“If we were to introduce a small fee of Uganda Shs100 per day from sim-cards that are used by these OTTs, that would generate about Shs 400 billion additional revenue,” Mr Museveni wrote.
But Ugandans on social media have used the hashtag #SocialMediaTax to express mixed reactions on the effected taxes with a big number blaming government for what they call double taxation and inconsiderate policies.
Only a few seem to agree with the principle behind the new taxes (developing the country).
While Virtual Private Networks would offer an alternative to override limitations on local access to internet use, it is unlikely that many Ugandans will afford them given that their rate of data consumption is often supersonic. This implies that the user will incur high costs to constantly buy internet bundles.
Only 15 million Ugandans use the internet, according to statistics by Uganda Communications Communication. The bulk of these people primarily use the internet to interact with others through social platforms like Facebook and WhatsApp.
Uganda’s internet penetration is said to be at 31.3%, far behind Kenya which is now at 77%. The extra cost (social media tax) comes at a time when many internet users in Uganda have continuously complained about the unscrupulous charges and ‘mysterious’ deductions of data by telcos on the watch of the regulator.
Some experts have argued that imposing extra taxes on top of the already costly price of internet could further hamper access to the internet and widen the gap in penetration.
This is how some Ugandans reacted on the new tax
“Those saying 200/- is little money or that VPNs cost more forget that people are not protesting the amount being paid, but the principle behind taxing every little thing from an already suffering economy so a corrupt government can get even more money to steal” – @SolomonKing
“They shouldn’t tax directly like that. It makes the population resistant to the institutions that provide services where they cannot find evidence to justify the higher taxes. It’s also retrogressive, remember that ugly graduated tax?” – @dsmasinde
“We need to organize a march to protest the taxes and the rights and freedoms being suffocated. #Socialmediatax #badgovernence #greed #uganda #HumanRights” – @Mr_kisolo
“I wonder if the ICT Minister can retable this to have this #socialmediatax waivered. As an economy that has not gotten its digital game up yet, this tax will only cripple the little the early adopters have started” – @ckamusic
“It’s quite shocking that the Ugandan telcos are not fighting this social media tax” – @Kasabiiti
“We are making final touches on the #SocialMediaTax Constitutional Petition. We need some more ICT lawyers to bolster the team. We shall also need some ICT experts to swear Affidavits on some technical points. In this fight, I am willing to become Uganda’s Max Schrems” – @SilverKayondo
“Imagine staying in a country where the dollar is at Shs 3800 and someone still has the audacity to tax u for a service they dont offer, own, or improve in anyway” – @HerLazyHighness
“If you decide to pay social media tax using mobile money, you’ll be charged Ugx 200 plus 1% tax on the transaction. Therefore, you’ll be charged tax on a tax. We are such a shithole country!” – @MrBusinge
