The Anti Social Media Tax

Sunday July 1 2018, The government of Uganda through the Uganda Communications Commission acted on its promise and implemented a UGX 200 daily  OTT levy on Social Media applications and a 1% tax on Mobile Money transactions. People living within the borders of the Pearl of Africa woke up to a black out of their favorite social media, reason being they haven’t paid the daily levy. The tax on social media transformed rapidly from concept of implementation when Yoweri Kaguta Museveni, complained that most social media users were rumor mongers. This is not the first time the government has had running battles with social media users.

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A local transacting at a mobile money kiosk. (Image by PC Tech Magazine)

During the 2016 general elections, social media and mobile money services were switched off citing security reasons. Just like back in the day,  today a number of internet users have downloaded and installed Virtual Private Network applications, VPNs to bypass this blockade. Not because they can’t afford the UGX 200, in fact VPNs consume a significant amount of data more than what one would pay for the tax, but as a way of defiance against the system. In a country whose internet penetration is still as low as 22% according to the World Bank, the government is undermining its own efforts to increase internet accessibility and affordability. Social media is an initiation point for new people into the internet world.

What cannot be bypassed by VPNs and other gizmos is the 1% tax on all mobile money transactions. Since their invention towards the late 2000s, mobile money services have provided a cheap,  quick, secure and reliable form of cash transfer. For the first time, one could transfer money from one corner to any other corner in an instant and at very affordable rates, thanks to the wide spread network of mobile money agents. Mobile money is a tool for financial inclusion especially today for those who can’t access mainstream banking services. Even when paying taxes to Uganda Revenue Authority using mobile money, one shall have to incur an extra 1% on the normal transfer charges. In other words, one is taxed for paying tax.

Rumors: Some say the 1% charge on mobile money was a call from banking institutions who thought mobile transactions where driving them out of business.

Mobile money had to a great extent made life easier for most Ugandans. One would pay for utility bills, school fees, pay for internet, buy goods and other services hustle free and at convenient rates. The same person will incur an extra 1% on all transactions.

“Its cheaper to move UGX 1,000,000 (One million Shillings) on a Safe Boda from, say, Bukoto to a relative/friend in town that sending it over MTN Mobile or Airtel Money. Its costs you over UGX 45,000 as compared to UGX 3,000 – 5,000 when you use a Safe Boda.”

Most Ugandans reacted to these new taxes under the #SocialMediaTax tag on twitter and other social media platforms. A petition has been logged seeking legal intervention from the constitution court. The petitioners say the new taxes are in breach of the Ugandans’ Constitutional Rights, highlighting the freedom of expression. A section of parliament including a few members from the ruling NRM party and opposition, also want the house to return from recess and find ways on how to better the 1% levy on mobile transactions or scrap it off.

 

 

 

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Here the are the million dollar questions; Where were these parliamentarians when these taxes bills were passed? Do you think both the petitioners and parliamentarians will be able to scrap off these two infamous taxes?

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