Uganda Telecom Operators Commence Implementation of the Social Media Tax

President Yoweri Museveni

Uganda’s major telecom operators, including the local division of South Africa’s MTN Group, will commence implementation of a new government tax on social media accounts before they can access them.

This follows the passage of Excise Duty (Amendment) Bill, 2018 by Uganda’s parliament which introduced new taxes on use of so called Over The Top (OTT) services: communications platforms offered over the traditional telecom networks

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They include popular social media platforms WhatsApp, Facebook, Twitter, Google Hangouts, Yahoo Messenger, Instagram, YouTube, Skype and others. The tax is supposed to come in with the 2018/19 (July-June) financial year and each user is supposed to pay a flat fee of 200 shillings ($0.0516) per day.

A joint press release from MTN, Bharti Airtel and Africell, said that from July 1 OTT services can be accessed on payment of the OTT tax by the customer.

Payment will be via the three telecom firms’ mobile money platforms. Customers will then be granted access to the platforms if they already have data on their devices.

Tax to be implemented despite criticism

Critics of the new law had argued that taxing social media would amount to restrictions on freedoms of expression on the internet while taxing mobile money transactions would hurt low income earners who had found solace in the services, after mainstream banks failed to reach them with suitable services. It will potentially hike the cost of data in a country where per capita income stands at about $600.

Data costs in Africa are already among the world’s highest, according to digital advocacy group World Wide Web Foundation.

Of Uganda’s 41 million people, 23.6 million are mobile phone subscribers and 17 million use the internet, according to state-run Uganda Communications Commission.

Opposition politicians voiced their reservations on the benefits of taxing the poor, in the name of revenue collection. Many argued that government should instead focus on tackling corruption to optimize the use of available government resources.

‘‘We are losing money to corruption yet we want to tax the poor who are trying to survive. I don’t want to be part of the parliament that strangles the life out of Ugandans, ‘’said Katusabe Godfrey, a legislator from the biggest opposition party in Uganda

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On its part, the Government has argued that the needs of poor Ugandans had been considered and that the revenue collected from the new taxes would be used to provide services like ‘free education, free healthcare and free roads’ that are demanded by the citizenry.