In Uganda, a strange tax raises a stink

Thursday July 5 2018

A smartphone user. FILE | NATION MEDIA GROUP

A smartphone user. Ugandans now have to pay a USh200 tax ($0.05) a day to access Facebook, Twitter, Instagram, WhatsApp and many such other digital crutches of modern life. PHOTO | FILE | NMG  

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Everyone remotely interested in public affairs will know of the dust raised in Uganda by controversial “social media tax” which came into effect July 1.

From that fateful day, Ugandans have to pay a USh200 tax ($0.05) a day to access Facebook, Twitter, Instagram, WhatsApp and many such other digital crutches of modern life, as a cash strapped government in Kampala goes in search of additional revenue.

No recent matter, even rigged elections, have aroused so much anger and a storm. Nor, indeed, have there been as many delightful memes produced in Uganda over an issue.

In a now familiar form of digital defiance, Ugandans scrambled to install virtual private networks (VPN) apps, which give online connections some level of anonymity, thus allowing them to get around paying the tax. The government threatened to block VPNs too., a VPN comparison site, reported that between Saturday and Sunday when the tax went into effect, the number of Ugandan visitors to its service rose by a remarkable by 1,567 per cent.

When the Uganda government blocked access to social media during the disputed February 2016 elections, it was reported that in just the space of 24 hours, users in the country made 1.5 million VPN installations.


But not everyone is tech savvy. That time most people just heard about “this thing” that enables to beat the social media blockage, and didn’t know anything else.

So some chaps set up shop to install VPN, and they were charging Ksh20 to 40 ($0.005 to $0.01) for a pop, and everyone went home.

However, a good VPN app will cost users up to three times more, so why not just pay the damn “social media tax”?

Some see it is an irrational double tax. They argue they already pay tax with their airtime and broadband purchases.

Kind of like if you went to a bar, and had to pay to pay an additional price for the glass. Then when you say, okay, you will drink your beer from the bottle, and you are told that is not allowed.

It will also be a tax on innovation in the digital sector, they add.

Media muzzled

Others say it is an attack on freedom of expression, because with mainstream media channels muzzled, the only place for independent expression is social media where, on the whole, the government gets bashed and tends to be outmanoeuvred.

Which leads to the most vexed point. The people who will not feel the “social media tax” are the government people and their supporters.

Regime critics say these people have access to state resources, or the proceeds of corruption.

Indeed, many people broadly are happy to pay, but oppose it because they say a corrupt government will simply steal the additional revenue.

So they are perfectly happy to pay more to a VPN app maker in the West, than subsidise their repression and provide money to crooks at home.

Activist groups have argued the tax will hurt small business, and particularly “mama mboga” businesses because the Ush1,400 ($0.36) they would pay over 7 days is their profit for the week. They even put out some figures to prove this.

This points to the other fundamental reason the “social media tax” is so unpopular. It has come at a wrong time, when the euphoria of past years over an ever growing economy has been replaced by a sense of bleakness.

Columnist Daniel Kalinaki, writing in TheEastAfrican’s sister paper The Monitor in Uganda recently noted: “Between 1992 and 2006, the number of Ugandans living in extreme poverty fell from 52 to 31 per cent, before falling further to 19.7 per cent in 2013.

“But the real story here is that those numbers were built on sand. Between 2005 and 2009, two out of every three people pulled out of poverty fell back in. And the real number of people living in extreme poverty increased from 6.6 million in 2012/13 to 10 million in 2016/17.”

And in an act of pigheadedness worthy of the Guinness Book of World Records, just over a week earlier, the Cabinet approved a generous increase of allowances for public servants that, you guessed it, took effect on the same day as the “social media tax”.

There is at least one good thing in all the furore in Uganda. It gives a sense of how deeply entrenched digital technology is now even in “small” African sectors like “Mama Mboga”.

The African proverb says “Where God boils his yam, is where the devil roasts his fish.” It was probably a little naïve to think only the people coming in to uplift poor women, would play alone in that space forever.

Mr Onyango-Obbo is the publisher of and explainer [email protected]