Govt goes over the top with new ‘gossip’ and mobile money taxes

If you must do an unpopular thing like impose a new tax, any new levy, the least you can do is roll it out neatly. If you can’t make the grade on substance, score on process.

The Ugandan government just failed on both fronts. Nothing new there. Some of us remember how smoothly the transfer, or maybe the non-transfer, of RDCs went last month.

After more than 30 years in power, you would think experience in running a government would show and benefit the country. The opposite is happening largely because of corruption and cronyism in government and the larger public sector.
When President Museveni first spoke about imposing a tax on use of social media, he jokingly referred to it as a tax on gossip. Joke or not, the President’s statement betrayed his motive.

He set out to make it hard for Ugandans to use social media, knowing well that we use social media to do business, consult doctors and other experts, keep in touch with family and friends — all very healthy things to do in pursuit of a sensible life. Why? It is because Ugandans were freely exchanging information lampooning the ever-increasing incompetence and authoritarianism of his government.

This is what he derided as gossip. If he couldn’t shut down social media permanently, having experimented with two shutdowns during the 2016 electioneering period, a roadblock had to be found to slow things down. And if that roadblock could yield hundreds of billions of shillings, after all human beings will never stop exchanging information (read gossip), all the better.

If you wanted to be kind, you could say that our government is being innovative and being a leader with the gossip tax. But how about the mobile money one?

The government had all the time to moot the idea, chew over and pass it at Cabinet level, debate and pass it in Parliament. It is one per cent at every stage: depositing, sending, receiving and withdrawing money via mobile money. Three days into implementation, the President of the Republic says the tax is 0.5 per cent, not one per cent. And that it does not apply to depositing money onto one’s mobile money account.

If he thought his clarification would stop the public firestorm, it instead has the people wondering whether we now truly have a government that has lost its marbles. For all he wants, Mr Museveni can put the tax at 10 per cent or whatever percentage makes him happy: Ugandans simply are aghast at the audacity of taxing money that is moving from Place A to Place B without any value added, except to the mobile money agent and to the telecom company.

Why not wait for the money to be deployed first, deliver value and tax that value? The public has raised this question and the government has thus far not seen it fit to answer.

Speaking of which, a wise techie head on a lugambo platform group I belong to said that the wickedness of these taxes, especially the mobile money one, has the unintended effect of slowing down the development of related products. These are products that our young people are working on and thereby honing their skills to survive in the digital economy.

For argument’s sakes, let’s say these taxes make sense. Is the Museveni government the right one to impose them? In the best of circumstances, a new government imposing such taxes would be resisted, but it is worse for a government without much political capital left, riddled with theft, abuse, wastage and leakage of public monies. If the policy had merits, the implementer has no credibility whatsoever.

Besides, Ugandans know that the unwieldy and incoherent politico-civil bureaucracy, sprawling as it is, will eat the collected money in per diems, theft, and wastage.

If President Museveni wants an honest conversation on these taxes, as he says he does, he should have had that conversation with Ugandans before the taxes came into force. He can only be taken seriously about a robust debate if he withdraws the taxes first. Anything else smirks of insincerity.

Concerns. For all he wants, Mr Museveni can put the tax at 10 per cent or whatever percentage makes him happy: Ugandans simply are aghast at the audacity of taxing money that is moving from Place A to Place B without any value added.

Bernard Tabaire is a media trainer and commentator on public affairs based in Kampala.
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Twitter:@btabaire