In a move that was received with dismay amongst a significant cross-section of the country’s citizenry, the Ugandan government has announced a new tax law which is targeted at the country’s considerable population of individuals who subscribe to social media and mobile banking services. According to the Ugandan government, the motivation behind the abrogation of the new tax law is the need to garner funds that will be channeled towards ‘coping with the consequences of online gossip.’
The new tax law, which is expected to have implications on users of social media platforms such as Facebook, was proposed by the country’s long-standing leader, Yoweri Museveni, who has been particularly vocal on the issue of online gossip. In a letter that was released to the country’s executive council in March, he urged the Ugandan finance minister to raise money towards catering for the blowbacks that come in the aftermath of social media gossip. As indicated by the new development, users of social media and online banking services are now mandated to make an upfront payment of Shs 200 (which is equivalent to USD 0.05) as a daily levy for access to all social media websites.
As spelt out in a joint statement released by the country’s telecommunication service providers on Sunday, starting from July 1, the daily levy will be charged on ‘Over-The-Top-Services’, which encompasses access to social media platforms such as Facebook, Instagram, Twitter, and even LinkedIn. The tax will be deducted by service providers from the account of subscribers, from where it will be remitted to the government’s coffers. The new development has not gone down well with a number of Ugandan social media enthusiasts who have resorted to the same platform; social media, to express their dissatisfaction with the new tax law.
The new tax law is coming in the wake of previous sanctions imposed by the Ugandan government aimed at stifling the use of social media in the country, with the most recent move being the February 2016 incident where the internet was blocked by the country’s telecommunications regulatory agency during the country’s elections. Acting on the directive of the presidency, the said regulatory agency has now enacted the new tax law, which by their reckoning, is a way of cutting down on online gossip whilst raising billions of shillings for the government in the way of revenue. The country’s president, in the aftermath of his well-documented complaint on how idle talk on social media was costing the country a lot of time and income, is imposing this levy through the country’s finance and telecoms agency as a way of clamping down on the trend and raising funds for the government.
A number of social media-conscious and tech-savvy Ugandans have already found a way around paying the daily levy by taking to virtual private networks(VPN). Social media and mobile money users will be most impacted by this new move which will incur an additional 1% tax.
Uganda’s new social media tax law has been described with such words and phrases as ‘bitter’, ‘anti-people’, ‘antisocial’, ‘created in bad faith’, and ‘not development-oriented’ in several quarters. As indicated by figures from the World Bank, internet penetration stands at around 22% in Uganda and for those already online, popular social networks such as Facebook, Whatsapp, and Twitter constitute the internet. In any case, it is envisaged that the Ugandan government will be raking in as much as USD 100 Mn in revenue from the new social media tax in the current financial year.
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