For more than 3 years, a tax has been levied in Uganda on the use of social media services. The government justifies this with the argument that internet giants in the country do not pay taxes. While this totally affects businesses trying to advertise on these platforms (even using an Social Media marketing panel in their marketing efforts), human rights activists, however, see this as a deliberate restriction of freedom of expression.
Abdulhakim Kawenja is a taxi driver in Uganda and offers his services through the online service Uber. His customers book a ride via the app – for this, he has to be online all the time. But for a year now, this has not been so easy. In July 2018, Uganda’s government introduced a tax on the use of Whatsapp, Facebook, and Twitter – but also taxi applications or dating platforms. It is called OTT tax, or in the vernacular: social media tax. Kawenja refuses to pay them.
“No, I don’t pay OTT tax. I am one of many who boycott this. I don’t think this tax is fair. Because every megabit of data is already very expensive. There are people in Uganda who cannot afford this tax. Others, like me, boycott them on principle. I already paid my other taxes – I have no problem with that. But if I buy 50 megabits for 1000 shillings and then have to pay 200 shillings in tax, then that’s not easy for many.”
Users avoid the tax
The tax was controversial from the beginning. 200 shillings a day – you can buy a kilo of corn flour. The majority of Ugandans have just under one dollar a day to live on, the equivalent of 4,000 shillings. Like Kawenja, many users have looked for ways to avoid the tax.
“I use VPN. With this application, I can choose which country I specify as the location. Some countries do not allow free access to social media, while others do. With that, I can then bypass the restrictions. The only disadvantage is that the application needs more battery and data volume and is sometimes slow.”
Shortly after the tax was introduced, Uganda’s police declared that the use of VPNs was prohibited. However, the law does not say anything about this. But this is just one of many inconsistencies. On the one hand, the government pursues the goal of making it easier for the population to use the Internet. On the other hand, Uganda’s telecommunications authority reports a decline in Internet users of over 30 percent – since the introduction of this tax. That’s around three million fewer people than before. Vincent Semura of Uganda’s tax authority says the state relies on these tax revenues to finance the expansion of infrastructure.
“The reason we introduced the tax was that more and more people are communicating over the Internet instead of making phone calls, and not only the telecom providers but also we as a tax authority are generating less revenue. Our original estimate was that we would collect an additional 200 billion shillings through this tax. Because the government must expand the Internet, especially in rural areas. But in fact, we did not succeed. We only took in 17 percent of it. One reason for this is that many people with VPNs avoid this tax.”
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Criticism: Freedom of speech restricted
Human rights organizations have filed a lawsuit against the tax – with the Constitutional Court. As is so often the case, the initiative for the tax came from President Yoweri Museveni himself. For lawyer Eron Kiiza, who represents the plaintiffs before the Constitutional Court, Uganda’s political system is taking on more and more authoritarian traits.
“This is the government’s final step in restricting freedom of speech. Especially the criticism of the government. The history of this tax clearly shows this: our president has complained that people are spreading too many rumors online. As a result, the tax was introduced. But there is no legal basis that makes spreading rumors illegal, neither in Uganda nor anywhere else in the world.”
Distrust of government
Uganda’s President Museveni has been in power for over 30 years. And there are no signs of an imminent replacement. Shortly after the introduction of the tax, there were protests – but they were violently suppressed. For lawyer Kiiza, the tax is worrying.
“The government has blocked the Internet from time to time. Especially during the election campaign. We have already had this experience twice in recent years. Against critics of the regime, on the other hand, the government proceeds with harsh laws. For example, with the so-called Computer Abuse Act. This was used, for example, against the activist Stella Nyanzi, who wrote an erotic poem about the presidential family on Facebook. She is still in prison for this. So there is clear evidence that this tax is not just there to collect money, but that it is a political tool to restrict freedom of expression.”
Members of parliament also have to pay
Recently, even members of parliament have complained that the tax is too high – and politicians in Uganda are among the top earners. The government had first announced that it would pay the costs for the more than 400 deputies from the state budget. But then parliament speaker Rebecca Kadaga spoke a word of power: The majority of the members of parliament would have voted for the tax law – then she would now have to bear the costs herself.