The recently introduced social media tax in Uganda continues to receive widespread criticism, that even Amnesty International called on Uganda to scrap this ridiculous social media tax, saying it robbed “many people of their right to freedom of expression, with a chilling effect on other human rights”. Yet Uganda’s President Yoweri Museveni unashamedly defends the country’s new social media tax, saying Ugandans were using such platforms for “lying”, and squandering the nation’s hard currency on fees to foreign-owned telecoms firms.
In a statement shared on Twitter, Museveni described social media as a “luxury by those who are enjoying themselves or those who are malicious…all the moral reasons are in favour of that tax.”
I have been told the newly-introduced social media and mobile money taxes have caused debate. To clarify, the tax on sending and receiving mobile money is 0.5% not 1%. For the rationale behind these taxes, read my statement here: https://t.co/SLe1UFb7P2
— Yoweri K Museveni (@KagutaMuseveni) July 4, 2018
In May Uganda’s parliament passed new tax laws that introduced a levy of 200 shillings ($0.05) per day for access to a range of online services.
Members of Parliament have too expressed mixed reactions to the public’s reaction to the newly introduced taxes on social media and mobile money. Only 38 out of 452 eligible Members of Parliament debated the Excise Duty (Amendment) Act, 2018, on the floor of Parliament before the legislation was enacted through voice voting to impose social media and Mobile Money taxes.
According to an analysis of the Hansard, 28 legislators who spoke on the matter on May 30, opposed the levies, while only 10 supported it.
It remained unclear why the rest of the lawmakers opted for silence, although others had already made their contributions when the House Finance Committee scrutinized the Bill introduced by the government.
The Excise Duty (Amendment) Act 2018 was passed on May 30 in a sitting chaired by Deputy Speaker Jacob Oulanyah. Proponents argued that the government needed to widen its tax base by targeting sectors which are undertaxed, while those against warned that the taxes would suffocate the poor.
With both sides taking directly opposed positions, Deputy Speaker Jacob Oulanyah asked the legislators to be judicious on deciding what to tax or not.
With no taxable alternative to the government proposal, Mr Oulanyah put the matter to vote and MPs chorused “aye”, allowing the Bill comprising other new taxes and exemptions to pass.
Yesterday, two of the 10 MPs who supported the Bill said they were not changing their positions in spite of the public uproar.
Aruu MP Odonga Otto proposed that the daily social media access tax should be increased from Shs200 to Shs500, while the levy on Mobile Money transactions be reduced.
Those against
“If you say such money is migrating from the traditional payment system – the banks – for example, if it is a salary, you would have already paid Pay-As-You-Earn but as you deposit, they charge the one per cent and as it is sent, you pay one per cent and on receiving, you pay one per cent. You would even be taxing condolences. Literally, even the dead will be taxed in Uganda if we allow this proposed one per cent transaction value tax on Mobile Money.”
Monica Amoding, Kumi Woman
“I oppose the proposed tax of one per cent on Mobile Money transactions mainly because I believe that this tax is going to affect the poor of the poorest and reduce financial inclusion, which we are seeking as a country..”
David Abala, Ngora County
“In the little commerce I learned in secondary school, there are basic principles of taxation: productivity, convenience, equity, ability and economy, among others. I do not know whether these proposed taxes meet these basic principles.”
Patrick Nsamba, Kassanda North
“I think we should, as Parliament, not be moved with the desire simply to expand the tax base, without knowing which part of the population we are touching.”
Pentagon Kamusiime, Butemba
“Now when they say money has shifted from banks to digital, let us put a tax, it means, “let us fail them.” They don’t have banks and they have gone to mobile money. Mobile money is a new thing here. As they start to exchange money here and there, they say, “Fail them.”
Santa Alum, Oyam Woman
“These poor people also pay taxes when they buy airtime. They also pay tax on the voice calls. When you now put taxes on Mobile Money, that means that you are taxing them very many times on the same product when they are using mobile phones.”
Annet Nyakecho, Tororo North
“We know that OTT services are mostly consumed by the young people. Before you access these services, you have to load airtime, which is again translated into Internet bundles. Already, I assume you will have paid some tax. So, isn’t this double taxation?”
Gershom Sizomu, Bungokho North
“I oppose the one per cent tax because it targets the poor. I do not need Mobile Money because I have my ATM card; I am rich and can easily access money compared to the poor people…”
Those in favour of the tax
Bright Rwamirama, Isingiro North
“This is an area where we can generate money to cover some of these deficits. Therefore, people should be encouraged to approve this tax because it is necessary.”
Ann Maria Nankabirwa, Kyankwanzi Woman
“Before we pass the Budget, we must pass tax Bills as an obligation of Parliament. The expenditure needs to balance with the revenue. We need to widen our tax base as Uganda. I support the one per cent levy on Mobile Money…”
James Kakooza, Kabula County
“The reality is that even in the developed world, you may be charged for spending an hour. In Uganda, they have started the expressway where people will have a choice to either use the old road or pay for using the expressway.
Odonga Otto, Aruu County
“This tax is optional; if you want, you pay, if you don’t want, you don’t pay. That is what is under the law. That is the information I wanted to give. The government is asking for just Shs1,000 and everyone is up in arms; this is lack of patriotism.”
Fred Mwesigye, Nyabushozi
“We want electricity, schools, and technical institutions in every sub-county and we want to increase salaries. How do you want us to raise the revenue to meet all these demands if you are failing to appreciate this small tax?”
David Bahati, Finance state minister
“It is not true that we are imposing tax on data, which is a main source of information. We are taxing OTTs. If you are using WhatsApp or Viber, the Shs200 which we are proposing here will actually translate to Shs70,000 per year… simple as that!”
Amos Lugoloobi, Ntenjeru North
“ The honourable member is misinforming this House that one per cent of Shs26,000 is Shs2,600. Mathematically, that is Shs260. Therefore, out of Shs26,000, that old person you are talking about would only be paying only Shs260.”
Cosmas Elotu, Dakabela County
“If you send Shs1,000 and you pay one per cent, I think that is a fair contribution. If you sent Shs1 million and you pay one per cent, it is also a fair contribution on the basis of your income. I strongly recommend that that tax be stayed in our Budget..”
Robert Kasule, Nansana Municipality
“If we refuse this tax government is proposing, that means we will not fulfil the agenda of government as far as meeting revenue to support service delivery is concerned.”
Abraham Byandala, Katikamu North
“Government does not have a money minting machine but generates money through taxes. At the end of the day, every service needs money. If we don’t pay taxes, we are reducing on the services to provide. If we want to improve the services offered to our people, we must pay taxes.
We must also broaden the number of people that pay taxes. Let us ensure that everybody gets involved in paying taxes.”
Members of Parliament have expressed mixed reactions to the public’s reaction to the newly introduced taxes on social media and mobile money.
A group of Members of Parliament, journalists, comedians, musicians and other artists in the entertainment industry as well as internet users and software creators, have rejected the newly introduced social media tax and tax on mobile money. Arguing that the new taxes were unfair and regressive, the group vowed to avoid the tax until the law is repealed. Addressing journalists in Kampala on Tuesday, they threatened to hold a demonstration on Friday if the government doesn’t address their concerns.
