Social media tax was introduced in Uganda on 1st July 2018, little did the policy makers know that netizens would oppose the tax that VPNs became one of the most searched words on the internet last year. Well, many compliant social media users decided to sacrifice a UGX 200 coin instead of risking their data on using VPNs as a wide section also voted against the OTT tax.
According to the 2018 report statistics by UCC, OTT tax greatly contributed enough revenue to URA though it was below target as the quarterly reports previously registered. As we all know, VPN downloads have never stopped seeding new portals as solutions to bypass social media tax and this could be the key issue robing revenue that could have shined on the OTT tax side.
Why VPNs might grow more popular in 2019
A Virtual private network (VPN) is simply a tunnel that allows a user to hide their public IP Address on the internet. It’s through this public IP that authorities assign an OTT requirement to access them.
In 2019, we see VPNs growing even more popular than the trembles OTT provoked in the previous quarter since we’ve seen many smartphone users choosing a VPN app as a standby alternative in case of a block out. More so, depending on the downloads rate and developer circles pushing up for free applications, the fatal battle with VPNs is far from over. Here are a few reasons why.
The free to download and access VPN apps
If a developer would like to earn money from a VPN app, all they would do is make it free and fill it with noticeable Ads or slow it down to get people to pay for a pro version. So, majority of VPNs are basically free to use which proves a much tastier slice that cruising on the OTT spiced end.
As a matter of fact, free internet services/products are some of the most widely used and so, if an internet product is to be successful it ought to have free features in one way or the other. The same way social media is free for everyone, its the same way users will always opt for some free software in order to grant them access to the buzz logged platforms.
OTT tax is a direct one
In Uganda, paying tax for ordinary citizens was a cat and rat chase around in the early 2000s but things have changed and everyone pays tax indirectly imposed on each and every product. But since OTT tax is directly levied on social media platforms to channel another source of revenue to the authorities, opposition is the best side for most users who prefer to dodge tax in all angles.
Paying OTT tax is a hard rock for basic income netizens
According to the 2018 UCC report on internet usage in Uganda, mobile internet bundles sell as hot cake in the country than any other form of fixed connection. This implies that bundles below UGX 5,000 like the Gaga Wednesday and Dont be cheated offers receive more traction than any other bundles available.
Like wise, paying OTT becomes a hard rock for many internet users who see UGX 200 as another 10MB package to stay connected on the internet. Hence, its no surprise that VPNs will continue becoming the country’s main gateways to taxed platforms than a spike in OTT tax revenue.
Basically, as UCC has always summoned service providers to block VPNs, we think its a battle far from over because the tax was not warmly welcomed by the general online local fraternity and it explains why as the expected OTT tax revenue continues to miss targets.
