Since July 1st 2018, at the inception of the infamous OTT tax, any increase to the number of social media users was greatly threatened. And the statistics are not about to keep this a secret – because the most recent quarterly communication industry report released by the Uganda Communications Commission reveals a declining trend.
According to the report, July 2018 saw 8,049,413 people paying the OTT tax, with a significant reduction by 1.2 million in August, to 6,871,173, followed by another decline to 6,844,528 for September 2018.
Accordingly, the report indicates, the government collected UGX 5.6 billion in July 2018, a figure that dropped to just over UGX 4 billion in August, and consquently to UGX 3.9 billion in September.
In the last three months of the Qtr under review, both the number of OTT taxpayers & figures for OTT revenues declined. Figures indicate subscribers using OTT services at least once in the quarter. 50.4% of the internet subscribers used OTT services by the end of September 2018. pic.twitter.com/aM7hBfage8
— UCC (@UCC_Official) January 25, 2019
Why are the numbers declining?
It seems to be a simple payment of UGX 200 (~0.05 USD) for every user per day of access, UGX 1,400 per week, or UGX 6,000 per month – but the burden is heavy to carry.
You can imagine, the OTT tax was introduced as the twin to the mobile money tax; with both challenged and critiqued by the masses as being exploitative and inconsiderate to the population – but only the latter was revised.
So, for someone that found it hard to use mobile money while taxed 1% on every other transaction made and could not afford to pay the UGX 200 daily to access social media, they will tell you how relieved they are about the revision to 0.5% for withdraws only – but very disappointed about the stagnation with OTT taxes.
Pollicy recently released a report titled “Offline and Out of Pocket” studying how the tax on social media has impacted the social and economic aspects of the day-to-day lives of Ugandans
The survey did not hide the fact that majority of the people asked felt that the OTT tax should be removed, with only 7.2% of these feeling that it should not be removed. Majority of these responded to have used social media for their business activities and have since reported reduced income following the tax implementation.
People are much more sensitive
Just as UCC reports a decline in the number of OTT subscribers and payments made, you will realize that the internet penetration across the country rose, most especially for mobile subscriptions.
The mobile internet subscription now stands at 13.5 million as of September 2018, a number that has grown from 9.8 million people recorded back in June 2018. It is not a doubt that a big portion of these increased numbers use social media and could have been affected by the tax.
But then what? They are sensitive…
With a huge collection of VPNs to choose from, at only the cost of their data bundles, Ugandans have opted to boycott the tax in its literal sense.
So many arguments have been laid on the table. From the violation of their freedom of speech, to the question of why the government is not taxing the companies that offer these services; you will get to know why people are not willing to pay the price.
