Uproar as Uganda telecom companies implement mobile money, social media taxes

Sunday July 01 2018

“When I woke up, I was surprised that I had not received any messages on my Whatsapp or messenger. I could not login to my Twitter account either. This was strange given the fact that I had just bought 10 GB of data two days ago. I was about to call my telecom service provider then I remembered it is July 1, 2018, the day when government said it would implement social media tax on orders of our President,” one Dan Mugeni wrote on his Facebook wall.

Active social media users in Uganda

Mugeni is one of the 2.6 million active mobile Social Media users in Uganda who are bashing government over what they have described as ridiculous tax. He says he was only able to write the post after paying the Shs200 through mobile money.

Like Mugeni, several Mobile Money and Social Media users in Uganda are currently desperate after telecomm companies implemented taxes on mobile money and social media as mandated by the government.

The implementation was made effective at midnight, July 1, 2018.


MPs okay taxes on social media

Wednesday May 30 2018


Parliament yesterday passed the controversial taxes on mobile money transaction and social media use amid strong protests from some members.
The new law will impose a mandatory Shs200 daily levy for WhatsApp users starting July 1, while mobile money transactions will also attract a one per cent levy on the total value of transaction.
But debate on tax on social media faced stiff resistance from younger MPs with Kyaddondo East MP Robert Kyaggulanyi, aka Bobi Wine, dismissing it as double taxation.
He was supported by Padyere County’s Joshua Anywarach, and Silas Aogon of Kumi Municipality.
The youthful MPs argued that since WhatsApp is accessed through already taxed airtime, another levy would be an infringement on the users’ rights.
But junior Planning minister David Bahati rejected the assertion that government is taxing data or internet, saying it is only the service being taxed. He said with only Shs200 charge per a day, each consistent WhatsApp user will pay only Shs73,000 in one year.
But the Excise Duty (Amendment) Act, 2018, also extends to the kitchen, with cooking oil facing a Shs200 levy per litre.
This pushed more MPs to put up more spirited counter arguments against the new taxes, arguing they would break the backs of ordinary Ugandans. But no amount of resistance from the MPs would defeat the backers of the Bills.
The Leader of Opposition in Parliamament, Ms Winnie Kiiza (FDC, Kasese), together with Kasanda North MP Patrick Nsamba (NRM), Ms Monicah Amoding (NRM, Kumi), and Justine Kayinza (NRM, Bududa), all laboured in vain to sway the House to resist the taxes.
“It is very easy for an MP to say that one per cent is little money, but to people who earn less than a dollar a day, it is going to break their backs,” Mr Nsamba said.
Ms Kayinza argued that rather than taxing citizens on mobile money, the government should direct its efforts on strengthening the country’s border points, to enable the Uganda Revenue Authority collect enough revenues.
The Leader of Opposition said the government should consider reducing the numerous tax waivers and have huge producers pay tax rather than ordinary consumers of services.
“We need the taxes but from who? Many people are getting tax exemptions, now we are targeting the poor,” she argued.
On her part, Ms Cecilia Ogwal (FDC, Dokolo) said the tax on cooking oil will not only split families, but also kick women out of businesses.
She warned that whereas women will feel the immediate pinch, the ultimate pain will be suffered by the men who will face divorce as the women abandon cooking.
Meanwhile, Mr Henry Musasizi (NRM- Rubanda East), the chairperson of the Committee on Finance, and his counterpart of the Budget Committee Amos Lugoloobi (NRM, Ntenjeru North) urged Parliament to support the tax proposals.
Mr Musasizi said the financial inclusion strategy rolled out by the government six months ago targets banks, mobile money, agency banking and Saccos as key revenue sources.
The only source for government to raise money for social services, the MPs argued, is through taxation.
Mr Musasizi’s position was echoed by Mr Bahati, who argued that tax is a contribution to national development and not a punishment.
“The appetite for good services must be backed by measures to support them,” Mr Bahati said.
On his part, Deputy Speaker Jacob Oulanyah asked the MPs to prioritise sound policies and not cling to populist positions that only break the economy.
“The fundamental question is, is it okay to have monetary transactions worth trillions going on within this country without being taxed?” he asked.
Mr Oulanyah said it would be proper for the MPs to point out concerns such as the cost of transaction services for agreeable amounts rather than objecting to the tax.
Other MPs who endorsed the move by government on more taxation included Aruu County MP Odonga Otto (FDC), Kyankwanzi Woman MP Ann Maria Nankabirwa (NRM) and Katikamu North MP Abraham Byandala (NRM).


The new social media tax affects social media platforms such as Facebook, WhatsApp, LinkedIn, Instagram, Viber, and Skype among others.

In the Budget for the financial year 2018/2019, the government of Uganda announced that it would charge those using over the top services or sites that offer voice and messaging over the internet, Shs200 daily.

In his letter directing the Uganda Revenue Authority and Ministry of Finance to tax social media, President Museveni argued that most Ugandans using social are rumour mongers. He, however, promised to exempt those using it for educational purposes. But critics question how he will determine those using it for educational purposes.
The government also mandated the telecom companies to charge 1% tax of the transaction value of the services on the mobile money.

How to pay the social media tax

Payment for social media, according to a joint statement from three of the leading telecom companies in Uganda, MTN, Airtel and Africell, can be made via mobile money. This can be done by dialling *185*2*5# for Airtel, and *165*2*5# for MTN. The tax is Shs200 and can be paid daily, weekly (1400), or monthly (6000).

The joint statement further states that 1 percent tax would be charged from whoever deposits, receives, pays and withdrawals the money using mobile money.

“Normal transaction fees and charges apply on all services until further notice,” the statement reads in part.


How government will collect the new social media tax

Saturday June 30 2018

KAMPALA. In the Budget for the financial year 2018/2019, the government of Uganda announced that it will charge those using over the top services or sites that offer voice and messaging over the internet, 200 shillings daily.

In his letter directing the Uganda Revenue Authority and Ministry of Finance to tax social media, President Museveni argued that most of the people using it are rumour mongers. He, however, promised to exempt those using it for educational purposes.

However what most people have been asking themselves is how the government of Uganda plans to actually implement this tax, and how those using it for educational purposes will be known.

A statement from three of the leading telecom companies in Uganda, MTN Uganda, Airtel, and Africell states how the new social media tax or tax on over the top services will be implemented.

Our reporters have been told to wait for the official statement, however, a source from one of the telecoms has confirmed that the statement is authentic.

In the statement, the telecoms say that effective 1st July 2018 when the new financial year starts, access to over the top services i.e Social media will be blocked, and to access them, Ugandans would have to pay.

Payment, according to the statement, can be made via mobile money *185*2*5# for Airtel, and *165*2*5# for MTN. The tax is 200 shillings and can be paid daily, weekly (1400), or monthly (6000).

Access will then be granted to customers up to midnight.

Civil society organisations have accused the government of trying to stifle debate online with this tax, while others like the Civil society Budget Advocacy group CSBAG, say the tax will have a negative impact on a business.

This therefore means that payments for bills of other services like electricity, Television, School fees and others will also be taxed.

The Uganda electricity provider, Umeme has since released a statement informing its customers that 1 percent tax would be charged from any client who pays the electricity bills using mobile money services.

They however, add that the tax does not affect those who pay their bills through banks and E-pay.

Daily Monitor has since conducted an opinion poll on its Twitter handle engaging our audience on how prepared they are to pay the social media tax.

According to the poll results, 19 percent of the 581 followers who participated said they would spend less time on social media, 11 percent said they would stop using social media while 70 percent said they would resort to using Virtual Private Network (VPN).

A random survey on social media also indicates that several Ugandans who have not been able to pay the daily Shs200 have found VPN the ultimate solution to bypass paying the daily excise duty charge on Over-The-Top (OTT) services, and have taken to social media to bash government.

Mobile phones in Uganda

Almost 24.8m or 70.9 per cent of Ugandans own mobile phones, a report by the National Information Technology Authority Uganda (NITA-U), revealed.
The report dubbed the National IT Survey 2017/2018, sampled 2,700 people among government ministries, departments, agencies, local governments and households across the country in 2017.


Experts tip on social media, fake news

Saturday June 30 2018


Kampala. Media practitioners meeting in Kampala last Thursday said the open public access to social media is leading to increased disinformation or fake news.

Speaking on the topic: “Social media and (dis)information”, Mr Mark Kaigwa, a lead panellist, said: “Disinformation leads to easy spread of fake news and propaganda, which is a big blow to democratic advancement.”

Mr Kaigwa, who is the chief executive officer of Kenya-based digital business consultancy Nendo, said social media use should be about relevance and not just about affording Internet data and posting any trash. He advised consumers of social media to always filter every information they receive so that they don’t fall victim to fake news.

Other panellists at the Uganda Social Media Conference included Ugandan blogger Ruth Aine, deputy editor of Africa Check Kenya Vincent Ng’ethe, German communications strategist Petra Borrmann, and African Centre for Media Excellence director of programmes Bernard Tabaire.

Users advised
Mr Tabaire urged social media consumers to educate themselves and understand the context of news circulating around to avoid being misinformed.
On her part, Ms Borrmann said hate speech, which is an age-old phenomenon, had also shifted to the new social media platforms.
“People run to various platforms to express their anger and pain. A post pops up with so much hatred and anger and with anonymous as identity,” Ms Borrmann said.

Mr Kaigwa said back in 2004 when Facebook use had just started, not everyone could afford a smart phone and people then paid more attention to happenings around them.
Mr Kaigwe encouraged social media consumers to visit a quiz called StopReflectVerify.com – Africa’s 1st fake news quiz to tell apart what is fake and authentic.

Social media tax
Ms Aine, while reacting to the audience concerns on social media tax to come into effect today (July 1), said the people deserve a say and should dialogue with the people in power.

About the conference

The event. The Uganda Social Media Conference is an annual event organised by the Uganda country office of the Konrad-Adenauer-Stiftung. It brings together stakeholders from government, civil society, the academia and media for constructive exchange on the impact of social media on state and society, highlighting both opportunities and challenges.

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The Uganda Communications Commission (UCC) 2014 Access and Usage of Communication Services Across Uganda study showed 52.3 per cent of Ugandans owned mobile phones.
The 70.9 per cent figure by NITA-U shows progress since 2014, with the rural folk outpacing urban people in terms of growth.
With 15.8 per cent of the population owning smart phones, the young (15-24 years), are at the forefront of smart phone usage at 28 per cent, the NITA-U report says. Analysts say young people have a higher appetite because they appreciate and understand what a smart phone can do.
However, analysts say their appetite could be restrained by the new taxes since they account for the highest number of unemployed population in the country.

Below are some of the reactions from social media users in Uganda;

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