The first day of July came a crude surprise for some of us. Just a few minutes after midnight those of us who were within the borders of Uganda found ourselves unable to access several internet sites because they had been categorised as ‘over-the-top’ services and slapped with a bizarre tax of UGX200 per day. Those who pulled the plug (Telecoms) took a while to get their houses in order and for a number of hours the internet in general was a mess and the USSD code for paying the tax (OTT tax) seemed not to work.
I eventually managed to pay the tax so as to access the over 50 social media sites that had been blocked. Yes the number is over 50. Think of any social media site and it is there on that list. So it is not just Facebook, WhatsApp, Twitter or Instagram. Even LinkedIn, Skype and Tinder!
The OTT tax is annoying largely because it comes from a place of deep ignorance. President Yoweri Museveni considers social media not only to be a luxury but also that it is mainly used for gossip. His man at the helm of the Uganda Communications Commission, Godfrey Mutabazi also showed his ignorance when he talked about tech giants like Facebook making a lot of money while trying to justify a tax that is being paid by us who are more of the product that mere users in this social media environment.
When it comes to the Mobile Money tax you have to find new anger to understand what these old men and women do instead of thinking. They introduced a tax that applies when you load money onto your mobile money account, when you receive money, when you send it, when you use it to make any payment and when you withdraw it. This immediately led to a drop in the usage of the service with many going back to moving money physically than incur a myriad of taxes on top of the ones that were already in place and the charges for sending and withdrawing.
These taxes clearly expose the fact that they were drafted by old men and women and thrown out to a country that is largely youthful. It is the young people that use Social Media more thanks to being tech savvy and not so loyal to traditional communication lines. In a country plagued by youth unemployment, the average Mobile Money agent is someone who was not around when Museveni and his friends stood outside parliament to announce that they are the new government bringing a “fundamental change.”
The social media tax resulted in some using Virtual Private Networks (VPNs) to bypass it while others are paying for one sim card and tethering all the others onto it. Such moves further prove that those who may have made estimates on how much money will be collected may have to adjust their ambitious projections.
The tax is clearly a regressive one that seeks to roll back the strides made by a budding digital economy that serves as a source of employment and enlightenment for young people in Uganda. It is also a huge blow to freedom of expression given that many young people rely on social media to express themselves and communicate with one another. Taxing this on grounds that it is a platform for gossip only gives away ones state of senility.
These old folks don’t know how these technologies work and why they work. All they want is something more to tax and fund their privileged lives and maintain a painful status quo. They are in essence looking for money to keep them going instead of working for their going away from the scene. After 32 years in power many should be looking for ways to create jobs for young people instead of taking away those very jobs. This is how you widen the tax base.
A lot of noise has been made and some have been forced to chew their words or claim ignorance. The President said the tax on Mobile Money should be 0.5% not 1% and that he signed the bill into law hurriedly. Why would an old man hurriedly sign away bills that are only going to make life uncomfortable for the young people in the country by killing their livelihoods and burdening them more for taxes? Has he not learnt any patience after 32 years at as president?
The finance minister also played the ‘I was not around when this tax was passed’ card. Talk is now rife of a review of the taxes but it is clear that those behind them need the money to sustain the amorphous patronage system. Already there is talk of not just increasing the pay for MPs but also getting the whole 426 of them, new bullet proof cars and escorts. Remember they have insulated themselves from most taxes.
The Mobile Money tax is a huge blow to financial inclusion and those who will abandon mobile money are unlikely to head to banks where the excise duty has been increased from 10% to 15%. Pushing people back to carrying around cash is not only bad economics it is also bad for security as more will be robbed and in violent ways. You do not want this for a country where kidnappings and assassinations are already a reality.
These old folks do not even see the irony of branding social media as a space for gossip and yet they are now using the same space to explain the errors and confusions surrounding these terrible taxes. Are they also gossiping? Have they paid their OTT tax like us or are they using VPNs? By the way given how much young people rely on social media sites as the gateway to most of what they read online, putting taxes on it means strangling the little reading and learning culture that was left.
These old folks have pushed us back to that horrible time when owning a mobile phone was a luxury (remember the president thinks social media is a luxury) and telecom companies were foolishly charging a ‘service fee’ for anyone to use their mobile phone to make or receive calls. Now we are having to pay a service fee in the form of this OTT tax so that we can access platforms that the government never created nor owns.
The internet is a vital utility and we should be focusing on increasing its access and in more efficient ways. Those interested in collecting taxes need to sit down with executives of companies like Facebook and ask for a cut on what they make from ads. They can even Google how to go about this or simply talk to smart young people and I am not even one of them.