My friend and I had a frenzied debate on the government’s proposed policy to shift the tax on the Internet use directly instead of charging Over the Top Tax (OTT). We all agreed on among other things that the tax was bad in principle and form. Its primary role was to reduce ‘wastage’ of time by ‘rumormongers’ and the making of money out of this scheme was an addendum.
Historically, taxation has never been warm heartedly welcomed, but even when the taxpayers settle for what they term as unfair tax, sense must be made out of the cut. Increasing the tax base is an ultimate goal of every tax collector, just like it is the ultimate wish of every tax payer to be accounted to.
The accountability aspect of it in my opinion should be towards making Internet more accessible, cheaper and safe by proportionately investing as much as what is or was collected. Levying taxes makes the Internet expensive and inaccessible and widens the exclusion gap that every serious country is trying to cover. Then should we tax breathe as well.
Whereas social media is just one aspect of the Internet, research shows that it keeps more people online than any other platform, and advertising firms, multi-national and micro-national entities have taken keen interest in social media platforms such as Facebook.
Data from Globalwebindex published by Digital information world shows the growing trend of the time internet users averagely spend on the social networking and messaging platforms as 2 hours and 22 minutes per day, globally.
The research shows that Africa comes second after South America which spends 3 hours and 29 minutes while Africa spends 3 hours and 10 minutes on these platforms per day. The consequence of this data which is accessible on the Internet is an increase in Foreign Direct Investment (FDI) from Muilti-National and micro multi-national Companies that are looking at efficiency and cost effective means of doing business, no doubt, Internet does wonders on this. And the people online translate internet into a scalable item.
Whereas the government collected Shs5.6 billion in July 2018, a decline of almost Shs1 billion went on until September 2018 and beyond, with the number of people online going down, the overreaching effect of this weighs much than the total revenue collected for two things; One, the tax has the chilling effect on the rate of Internet penetration in the country, one of the factors that have been identified in slowing Internet penetration is the high costs associated with access.
Therefore, even if government opens up funds to innovators in innovation hubs or comes up with policies and drafts good visions and goals on digitalisation with a low rate of Internet use, it is a walk in futility and the innovators and service providers around the country will always complain about how our people ‘don’t understand how to use the Internet’, the right ‘gamble’ to fight unemployment is lost with in this whole web.
Two, the tax has a suffocation effect on free speech and other freedoms, whereas it is pertinent for State to protect its citizen, protecting them from rumormongering was an unjustifiable and overenthusiastic course of action, we may sugarcoat the intention but the circumstances before the law was introduced was and is still naked.
In the ratiocinations of a friend and I, both of us being good Christians, he referred me to Luke 2:12-13 where tax collectors came to be baptised and they asked Jesus, “teacher, teacher, what are we to do?” He replied, don’t collect more than is legal.
The question of what is illegal in the circles of lawyers is determined when courts say otherwise the indispensable rule in constitutional law is that a law passed by those with legitimate authority is valid and Constitutional until otherwise stated by courts, a plethora of case law can be quoted on this.
For this, the Constitutional Court must determine the “OTT case” as soon as possible, freedoms and rights of people continue to be violated .
Mr Muhindo is a lawyer.