MOBILE MONEY AND SOCIAL MEDIA TAXES IN UGANDA

Uganda has gone ahead and rolled out a controversial daily levy on citizens for using social media platforms like WhatsApp, Facebook, Twitter and Skype, enraging many of its online citizens. The major telecom companies, MTN, Airtel and Africell, set up special mobile money menus for users to pay the tax or be denied access to a list of 58 websites, apps and voice calling platforms. While Uganda’s government has blocked internet access in the past, most notably in the run-up to the February 2016 elections, it had never officially implemented targeted website or app blocking on scale. As it turns out, it was actually pretty straightforward for a network operator to set up such a tax collection and enforcement operation, according to local telecom engineers who spoke to Quartz on condition of annonymity. These telecoms insiders explain it hasn’t required any new technology or external assistance to implement the “tax-or-block” system. Local telecom engineers only had to write new rules onto existing systems that already handled customized products like zero-rated services and the popular social bundles. The social bundles allow users access to the social apps (not the wider internet), a day or week at a time, at reduced cost, it has helped drive up usage of services like WhatsApp and Facebook. In the case of the social media tax, the engineers wrote a new rule requiring that the request be run through the charging system. When a user pays the tax, the mobile money system itself communicates with the charging system, sending information including the phone number and period of validity for their tax payment. So, when a request for access to any of the taxable apps is sent to the charging system, that phone number is checked against information sent in from the mobile money system. If everything checks out, the request is served. If there is no record of tax payment or the payment has expired, the request is denied. In many ways, Uganda’s big three mobile network companies find themselves between a rock and a hard place. On the one hand social media apps have been key in driving usage, particularly for customers paying more for internet data. But on the other, if they don’t implement these new rules, under the terms of their licenses they could be fined or suspended by the regulator. But it’s also notable that there has been little public pushback from the operators. Smaller internet service providers are not even bothering with the details of the new regulatio . They have simply increased the cost of data across the board, assuming that whoever has access to the internet will in fact use anyone of the now taxable sites or apps at least once a day. Tangerine, a smaller ISP in Kampala, sent messages to their customers announcing that its monthly bundles of data will now cost an extra 6,000 Ugandan shillings, following a government directive to tax use of over the top internet services. This approach is contradiction with Museveni’s earlier reassurances that the tax would not apply to data itself because the wider internet is useful for educational purposes. Lawsuit Meanwhile, five users and one technology company, have taken their disagreement with the tax to the Constitutional Court. They are suing the Uganda Communications Commission, Uganda Revenue Authority and the country’s Attorney General. Raymond Mujuni, a journalist with a local TV station is one of the people who filed the petition. His main argument is the tax is will exclude young people’s voices from public discourse online and offline because social media is both a core platform their expression and also what mainstream media journalists turn to, when sourcing from young people. In his affidavit, he refers the court to an earlier freedom of speech judgment made in favor of two other Ugandan journalists: Charles Onyango Obbo and Andrew Mwenda. “The judges in that case ruled that any limitations on freedom of expression must be based on demonstrably justifiable reasons. In this case, the government has many other alternatives for revenue generation that don’t limit freedoms,” Mujuni said. Silver Kayondo, another petitioner swore an affidavit that lays out a whole range of objections including that, the president’s personal views about social media cannot be a basis for national tax law. The tax was first suggested by president Yoweri Museveni who complained that social media was being used for gossip. The petition raises other issues including net neutrality and double taxation.