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Uganda: One year of social media tax

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“Children should be taught how Google works, what is behind it, rather than binding them to its products,”

The introduction of a social media tax a year ago in Uganda caused an outcry from government critics and rights groups. And today, even some of the staunchest supporters of the tax are no longer convinced.


Taxi driver Abdulhakim Kawenja checks his phone. His regular customers usually contact him via WhatsApp. When he doesn’t have any customers, he offers his taxi services via Uber. 

Kawenja needs constant internet access, but in the past year that has become difficult. In July 2018, Uganda’s government introduced the “over-the-top” (OTT) tax, commonly known as the social media tax, for online services such as WhatsApp, Facebook and Twitter.

The 26-year-old boycotted the tax. “I just didn’t find it fair,” he said. After all, internet costs in Uganda are already quite high. Uganda’s gross domestic product (GDP) per capita per day is currently at $1.90 (€1.69 or 7,000 Ugandan shillings), and many live off less. “If you pay 1,000 shillings per day for your internet data of 50 megabytes and you then have to pay an extra 200 shillings tax, that’s a big challenge,” Kawenja says. For 200 shillings ($0.05, €0.04), you can by a kilogram of maize in Uganda.

Ugandan internet usage went down by 30% when the tax was introduced

VPN to dodge OTT

Kawenja usually pays his taxes. He pays his income tax; he just doesn’t pay his social media tax. “I prefer to use VPNs so that I can avoid the Ugandan social media restrictions,” he says. The VPNs allow him to use an IP address outside Uganda. This eats up more battery power and data than a local address would, but he still thinks it’s worth it.

For many young Ugandans who are critical of the government, boycotting the tax is a silent rebellion against the ruling party. In fact, the social media tax initiative came from President Yoweri Museveni personally. In early 2018, he complained that young people spent too much of their time on WhatsApp and other online applications and were responsible for spreading false information.

A short while later, Museveni loyalists proposed the bill in parliament. The law was quickly passed in May 2019 and came into force in July in time for the start of the financial year. From one moment to the next, Ugandans were no longer able to simply send or receive WhatsApp messages. Instead, a message popped up asking them to first pay their tax via a mobile money transfer. On the same day, opposition politicians, including the prominent musician and lawmaker Robert Kyagulanyi, also known as Bobi Wine, called people out to protest. The police dispersed the protests with tear gas and rubber bullets and that was that: The tax was there to stay.

Attack on freedom of expression?

For human rights lawyer Eron Kiiza, the taxes are simply a further instrument to muzzle freedom of expression and speech. “There is no legal prohibition of rumor-mongering if it does not constitute defamation. There is no national or international law that prohibits rumor-mongering,” Kiiza explains.

Kiiza is currently working on a class action law suit filed by journalists and rights groups at Uganda’s constitutional court. He’s hoping for a hearing soon.

Ugandans have in the past experienced the government blocking the internet during protests and elections, but Uganda’s government denies that there is any connection between the tax and the internet shutdowns.

“One of the reasons that this tax was introduced is that we see more and more people using internet data for communication and therefore the telephone companies were losing revenue, as well as the government,” Vincent Semura from Uganda’s tax authority told DW.

Protests against the tax were answered with tear gas and rubber bullets

Overestimated revenue

A year after the introduction of the tax, however, even Semura admits that the government overestimated the gains from the new tax. So far it has brought in just 17 % of the hoped-for revenue. “So many people are avoiding the tax with VPNs,” says Semura.

Uganda said it needed the money to further develop internet infrastructure in rural parts of the country with little internet access. At the same time, however, Uganda’s state-run telecommunications authority reported that the number of internet users had dropped by 30%, or up to 3 million users, since the introduction of the tax.

A year after the introduction of the bill, lawmakers, who are among the country’s highest income earners, also started complaining about the costs. Initially, the government had said that it would foot the tax bill for the parliamentarians. Then, however, House Speaker Rebecca Kadaga put her foot down: Most of the lawmakers, she argued, had voted for the bill. Therefore, she said, they must carry the costs.

Read more: Digital colonialism: Cheap internet access for Africa, but at what cost?

Digital colonialism: Cheap internet access for Africa but at what cost?

Africa is developing its digital infrastructure with the support of know-how and technology from Silicon Valley. Is it giving the tech giants too much power?

Yellow is the color of South African telecommunication giant MTN. The market slogan Y’ello is plastered on billboards along South African highways, promising bargain offers. As one of Africa’s front-runners on the digital scene, MTN has also embarked into the Arab market.

But the race to control Africa’s digital market is dominated by others, like US tech giants Amazon, Google and Facebook, as well as China’s Huawei. Their declared goal is to create a digital infrastructure for Africans by providing better access for those people who had formerly had no or very little access to the web.

It’s an ambitious project. According to a recent study by the World Bank, only one in five people in sub-Saharan Africa has internet access. This is well below the world average, despite countries like Kenya and Liberia leading the way with an internet penetration of over 80%.

Read more: Who brings the internet to Africa’s remote regions

Sociologist Michael Kwet warns of the dangers of Silicon Valley’s plans for Africa — a scenario which he calls digital colonialism. The problem, in Kwet’s eyes, is this: US tech firms are aiming to control the digital ecosystem and therefore the entire movement of data for the continent.

That’s anything but democratic. “A democratic system would be open and we would see a kind of decentralization,” Kwet says.

South Africa’s MTN is one of the leading African tech firms on the market.

Local firms don’t stand a chance

The race for digital dominance is on and, as Kwet says, the companies mainly have their own interests at heart.

“These companies are looking for their own profit and new markets. So any country that shows some promising signs of development and the ability to develop some kind of technological ecosystem — you better believe that Google and Facebook, Apple, Microsoft and others are going to show up,” Kwet told DW.

Read more:Wiki foundation wants to decolonize the internet with more African contributors

Local firms such as MTN are no different, according to Kwet. They mimic the aggressive marketing policies of their US counterparts.

But Kwet doesn’t think that MTN and other local firms can be a match for the Silicon Valley giants. “There’s never going to be a Google or other search engine growing out of South Africa, much less Ethiopia or Botswana.”

Initially, the web was an opportunity to democratize public spaces, Kwet says. But within a short period of time, it changed into a technological system controlled by a handful of companies. Their collection of user data amounts to constant surveillance. “Facebook and Google always know what we are up to,” Kwet said.

Transform Africa Summit kicks-off in Kigali with a focus on digital innovation

Africa’s digital dilemma

Developing countries generally stand little chance of asserting themselves against the tech giants. The wide range of offers from abroad prevent the development of the tech industry in these countries. Moreover, they are not able to protect their citizens from data abuse, explained Kwet. Their laws are too weak and their administrative bodies often lack the power.

Most countries, therefore, find themselves in a dilemma. If they want a digital revolution, from which many African countries are hoping to gain jobs and economic growth, people will need better internet access. “The problem for many of these countries is that the investment costs for such infrastructure projects are so high that they have to depend on these foreign companies,” said political scientist Tina Freyburg from the University of St Gallen in Switzerland.

Is there a way out?

Kwet thinks there needs to be a pushback. “There’s a lot at stake and I think it’s going to take popular awareness and some pressure from the grassroots to begin to reverse some of these trends.”

It’s important that this goes hand in hand with education. “Children should be taught how Google works, what is behind it, rather than binding them to its products,” Kwet said.

Ultimately, he sees great potential in technology systems that can cooperate freely with one another, without being controlled by firms. There are already a few attempts to do this “but creative thinking outside the box is not something that we’re seeing yet.”

—— AUTO – GENERATED; Published (Halifax Canada Time AST) on: July 21, 2019 at 11:08AM

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