Despite strong protests and criticism, the Ugandan parliament has passed the controversial taxes on social media use and mobile money transaction.
The new law, which will begin from July 1, will impose a mandatory 20o shilling daily levy (less than a dollar) for WhatsApp users.
More about this
Mobile money transactions will also attract a one per cent levy on the total value of each transaction, according to the new law approved on Wednesday.
In a bid to control what he calls gossip and to rake in more revenue to the state, Ugandan president Yoweri Museveni in April this year slapped new taxes on social media platforms such as WhatsApp, Facebook, Twitter, Skype and Viber.
The move which was confirmed by Matia Kasaija, the Finance Minister is expected to raise between $108,000,000 (Sh400 billion) and $270,000,000 (Sh1.4 trillion) from social media users annually, the government said.
The president, in a March 12 letter to the Finance Minister said: “I am not going to propose a tax on internet use for educational, research or reference purposes… these must remain free.”
“However, olugambo on social media (opinions, prejudices, insults, friendly chats) and advertisements by Google and I do not know who else must pay tax because we need resources to cope with the consequences of their olugambo,” Museveni was quoted by local media Daily Nation.
Museveni had before his proposal been admonishing Ugandan authorities for being lax in exploring new sources of tax revenue.
On the issue of “over-the-top” platforms (OTTs) such as WhatsApp, Skype Viber, Twitter, and so on, the president wrote:
“If we were to introduce a small fee of Uganda Sh100 per day from sim-cards that are used by these OTTs, that would generate about Sh400 billion additional revenue.”
The Minister of Finance subsequently confirmed that the president’s recommendations have been approved by cabinet and will be included in the 2018/2019 budget.
Ugandans, have, however, expressed disgust at the development, saying it infringes on individual freedoms.
Others are also wondering how social media companies that do business in Uganda will be taxed since internet access is not based solely on the activation of data bundles through the purchase of airtime from telecoms.
For some lawmakers, instead of taxing social media, the president must pay attention to the fight against corruption in government.
Uganda has over the years been plagued by corruption scandals which have left billions of public funds allegedly getting lost or embezzled.