By Dennis Daniel Muhumuza
It was first thought to be an April 1 Fools Day prank when a big headline in Daily Monitor read, “Museveni slaps taxes on Social Media users.” Turns out this was no prank after all, for on 1st July, the new tax on social media took effect in Uganda, causing consternation among the populace to the extent that some headed by popular singer and parliamentarian Hon. Robert Kyagulanyi (Bobi Wine) took to the streets in protest, only to be quelled by police with rubber bullets and teargas.
The new tax on social media users was orchestrated by President Yoweri Museveni who in March wrote to the Finance Minister Hon. Matia Kasaija castigating him for failing to identify tax sources that would increase government revenue. In the same letter, the president proposed tax measures that would help the government raise about 400 billion shillings annually from social media users.
Obviously, the president has had no love affair with 17 million Ugandans that are said to be active internet users; who mostly use online platforms and messaging apps to criticize him. President Museveni sees them as gossipers that should pay through the nose for ‘gossiping’. “I am not going to propose a tax on internet use for educational, research or reference purposes… these must remain free,” the president wrote, “however, olugambo on social media (opinions, prejudices, insults, friendly chats) and advertisements by Google must pay tax because we need resources to cope with the consequences of their lugambo.”
Three months after the president’s letter, Parliament approved what is officially called the OTT (Over-the-top) tax to be paid by all social media users through electronic means. To access WhatsApp, Facebook, Twitter, Skype, Viber, Instagram, SnapChat and LinkedIn among other social media platforms, one must pay Shs.200 per day. To make matters worse, the government through the Excise Duty (Amendment) Bill 2018 also introduced a 1% tax on mobile money transactions that would affect both the sender and recipient. This is an extra charge and tantamount to double taxation considering that mobile money transactions were already being taxed.
Feeling the pinch
As soon as the tax took effect on 1st July, there was a national outcry as citizens complained that the tax is an enemy of progress and an attack on the right to freedom of speech guaranteed in the constitution. Although the Minister of Information Technology and Communications Hon. Frank Tumwebaze defended the new levy arguing that the revenue generated would improve internet connectivity and penetration in the country, that didn’t assuage lawyers, politicians, pundits and activists who have since not ceased calling upon the government to scrap the unfair tax. “By making people pay for using these [social media] platforms, this tax will render these avenues of communication inaccessible for low income earners, robbing many people of their right to freedom of expression, with a chilling effect on other human rights,” Joan Nyanyuki of Amnesty International was quoted in the press saying.
In the same vein, the mobile money tax has attracted more criticism than the social media tax and has since provoked more protests and calls to shun mobile money use. Because of wide criticism, Government has gone back to the drawing board to review the new taxes. One thing for sure the government will not scrap these taxes since the president has averred that having a wider tax base is what will help the government to generate more revenue and be in position to cut back on external borrowing without slowing down in as far as providing social services and financing big infrastructure for the greater good.
The alternative view
Many argue that to raise more revenue, the government does not need to burden Ugandans with high taxes but merely needs to reduce wasteful spending and fight corruption decisively. The president currently has 163 advisers who continue to earn huge monthly wages. These could be ditched in favour of specialized consultants that can only be hired on a temporal basis.
The president also has so many RDCs who equally earn high stipends and emoluments yet their work can be done by local council leaders that saturate every district. The large cabinet and many MPs (420) that have emerged from the compartmentalization of districts could be reduced, plus the president needs to stop dishing out cash-stuffed envelops at the expense of the tax payers. If such wasteful spending is reduced, the government would have no challenges raising 32 trillion shillings for its annual budget instead of overburdening the citizen with high taxes.
In all, Ugandans are waiting with bated breath to see what the review of the new taxes and levies will be. However, there is a general consensus that the tax burden spells doom for Museveni who has been in power for 32 years. Some Christians have likened what will happen to the current regime to what happened to King Rehoboam when he refused to listen to the cries of his people in a story well-articulated in 1 Kings 12.
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