Science-Technology, Africa

'Uganda’s move to tax internet data will hurt innovation’

While scraping social media tax, East African country in its annual budget imposes 12% excise on internet data

Hamza Kyeyune   | 17.06.2021
'Uganda’s move to tax internet data will hurt innovation’

KAMPALA, Uganda

While scrapping the controversial social media tax, the Ugandan government in its annual budget for the 2021-22 financial year has introduced a 12 % excise duty on internet data usage.

Two years ago, the government had imposed a 200 Ugandan shilling ($0.05) daily levy on people using messaging platforms like Facebook, WhatsApp, Viber, and Twitter.

But the internet users soon discovered a way to circumvent the tax regime by shifting to virtual private networks (VPN) and wireless networks.

The latest move will force 21 million internet users to shell out 12% tax while purchasing data packages.

Opposing the government move, activists and experts have feared that it will hurt innovation and stifle e-commerce and fundamental freedoms.

Speaking to Anadolu Agency, Swaib Kaggwa, a tax consultant, said authorities should have raised tax revenue from profits accrued from internet advertising and other online businesses.

Proposing this internet tax, President Yoweri Museveni dismissed social media platforms as gossip groups. Finance Minister Amos Lugoloobi while presenting the annual budget said the revenue collected through internet tax will be used to achieve the ambition of digitization.

According to the Finance Ministry, the government is planning to extend broadband infrastructure up to the smaller towns and expand the reach of the digital television and radio broadcasting network to facilitate electronic distance education for learners.

The ministry has also proposed to facilitate the development of software solutions to support electronic operations.

Social media has emerged as an important political tool in Uganda for both the ruling party and the opposition. Last year authorities asked Facebook and Google to pull down social media pages belonging to the opposition politician Bobi Wine in the middle of the presidential campaign.

The government later blocked all internet connectivity during the election campaign which lasted for nearly a month.

Andrew Karamagi, a lawyer, said that the motive behind imposing a tax on internet usage was to further curb the flow of information. He said the internet-based platforms had played role in exposing several acts of atrocities committed by police and the army.

“Governments often found it difficult controlling on censoring, platforms like YouTube, because when you shut down one, another will be created in minutes, and the cycle continues,” Karamagi said.

Speaking to Anadolu Agency, Issa Katungulu, a digital media expert, said while it is true that issues of misinformation and disinformation are associated with social media, but at times it provides a counter-narrative.

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