Ugandan Lawmakers Approve Mobile Money And Social Media Tax

Written by Peter Pedroncelli
social media users - social media tax
Ugandan social media users will need to pay a daily tax from July. Photo – TheNerveAfrica

Lawmakers in Uganda have officially approved a new law that will allow for a mobile money and social media tax for citizens who make use of those digital services.

The Ugandan parliament passed the Excise Duty Amendment Bill this past week, with the laws within the bill coming into effect on 1 July 2018, according to ITNewsAfrica.

Ugandans will have to pay $0.05 per day to use social media, while a one percent tax will be imposed on all mobile money transactions.

In addition to sites such as Facebook, Twitter and Instagram, messaging apps such as WhatsApp and Skype are considered social media platforms in this regard, and use of those applications would therefore also result in the tax needing to be paid. Government believes that they will collect around $108 million as a result of this new law.

Uganda has a total population of 41 million people, with 23.6 million mobile phone subscribers and 17 million using mobile devices to connect to the internet, according to Reuters. Facebook users alone in the country amount to around 2.2 million, reports Internetworldstats.

Considering these 2.2 million Facebook users alone, that would translate to around $110,000 daily for the domestic financing budget, not to mention the collections from other social media users and the one percent mobile money tax.

No clarity over social media tax implementation

Ugandan president Yoweri Museveni recently explained that government would introduce taxes to discourage the use of social media, as he said that people used such platforms for lugambo, which is a Gwere word meaning gossip or the spreading of rumours, DailyNations reported.

In addition to the proposed social media tax, the Ugandan government has introduced a one percent tax on the total value of all mobile money transactions, with withdrawals and deposits affected.

While the tax on mobile money transactions will be fairly easy to implement and manage, it is not clear how social media taxation will be carried out, according to ITWebAfrica.

There has been speculation that government will ask mobile operators to impose the tax on each SIM card which is used to access social media or messaging apps, as most social media users use their mobile devices to connect to social media.

But with no mechanism available to distinguish between private and business social media use, this may cause some confusion and will no doubt further annoy the majority of users who are against a social media tax.