Monday 18th March 2019

Uganda enforces tax on social media and VPN use, blocks non-paying citizens from accessing platforms

The cost of 1GB of mobile data is 15.5 percent of the average Ugandan's monthly salary. The new tax levies a 200 shillings per day charge on the use of social media and OTT services.
Jason Smith
by on 2nd July 2018

Ugandan social media users are unable to access social networks after new legislation taxing social media use went into force as of the 1st July.

The new tax is an outcome of a directive issued by President Yoweri Museveni in March. Under the budget for 2018/19, citizens will be charged 200 shillings (USD 0.05) per day for their user of over-the-top (OTT) and social networking services like WhatsApp, Viber, Facebook and Twitter.

Citizens sending mobile money will also be charged a 1 percent tax, which means the new measures will also affects citizens paying for other essential services like utilities. Under the new legislation, the tax on mobile money transfers has also increased from 10 to 15 percent.

According to Daily Monitor, President Museveni sent a letter to the Ugandan Revenue Authority and Ministry of Finance arguing that most social media users are “rumour mongers.”

In the letter he also proclaimed the Government needs resources to “cope with the consequences” of social media users’ “opinions, prejudices and insults.”

He has stated he plans to exempt the use of social media for educational purposes from taxation, however it is unclear how this will work in practice.

According to The Collaboration on International ICT Policy in East and Southern Africa (CIPESA), the President believes the new taxes could raise up to $108 million for the Ugandan economy.

Moreover, according to the Alliance for Affordable Internet, in 2016 the cost of 1GB of mobile data in Uganda is 15.5 percent of the average Ugandan’s monthly income. It has also been claimed the new tax will disproportionately affect low-income Ugandans.

According to CIPESA, the new legislation will also apply to virtual private networks. In full, the new legislation states that it will apply to “the transmission or receipt of voice or messages over the internet protocol network and includes access to virtual private networks.”

Uganda isn’t alone in levying taxes on internet usage. Last month we reported on new legislation enforced in Tanzania that demands online content providers e.g. bloggers, pay a $900 per year license fee to publish content.

Online publishers who fail to pay the license fee can face fines of up to $2,500 or 12 months imprisonment. The potential fine is about three times the salary of the average Tanzanian citizen.