On the 1st of June, 2018, the odds fell out with Social Media and Mobile Money users in Uganda when the Parliament passed the 32.4 trillion shilling 2018/2019 budget . The budget included a UGX 200 (~0.05 USD) tax “per user per day of access” on “over the top services” (OTTs). The OTT Tax was previously known to Ugandans as Social Media Tax when the President first hinted on its possibility in a leaked letter. The same budget introduced a Mobile Money tax on “receiving, payments and withdrawals” valued at 1% of the value of these transactions.
However, the President came out to clarify that the tax on Mobile Money transactions was 0.5%, not 1%. Also, they removed the tax on deposits in the amended excise duty tax, which is yet to be approved. Those that paid the 1% tax will be refunded according to the statement from the President.
On July 1st, 2018, so many Ugandans were locked out of Social Media platforms like Facebook, Twitter, Whatsapp, Instagram. This happened just a few minutes after 12 AM. Literally, acess to OTT Services was completely cut off for many who had not paid the tax.
Public uproars and countless statements advocating for uptake of the taxes followed suit. The ICT Association of Uganda (ICTAU) released a statement on July 4th raising issues about the two taxes. A group of activists filed a petition in the Constitutional Court seeking nullification of the OTT tax. And if you’ve been following trends on social Media platforms, you have probably seen the hashtag #ThisTaxMustGo. The OTT Tax and Mobile money tax dominated headlines and talk shows in Uganda and attracted the attention of international media houses.
Timeline of events for the OTT Tax and Mobile Money Tax.
March 12th, 2018: The first hints about the two taxes appeared in a leaked letter of the President addressed to the Minister of Finance, Planning and Economic development, Hon. Matia Kasaija.
March 31st, 2018: Parliament approved the Social Media and Mobile Money taxes after a heated debate.
April 20th, 2018: World Bank senior economist for Uganda Richard Ancrum Walker lauded Uganda for the Social Media Tax. He said that for long, public debate in Uganda has been about expenditures and not revenue mobilization. Walker said he was happy that this time, there has been a lot of public debate on the administration of revenues, which is crucial for Uganda.
July 1st, 2018: After 12 AM on July 1st, many Ugandans lost access to OTT Services until they paid the OTT Tax using the official USSD codes. Or apparently, using VPNs.
July 2nd, 2018: Uganda government sued over social media tax by Tech company Cyber Law Initiative and five other individuals.
July 11th, 2018: Ugandan Prime Minister Ruhakana Rugunda announced that the Government of Uganda would review these taxes.
On July 13th: Whitehead Communications released a survey to gather public opinion on the impact of the taxes in order to contribute a resource for evidence-based research in their review. The survey was closed at 5pm on
July 16th, 2018: The survey closed, collecting 2,918 responses (after data clean) generating data for free use by the public at large.
Facts and figures as collected by Whitehead Communications.
Whitehead Communications conducted a survey on Social Media and Mobile Money Tax in Uganda between the 13th to 16th of July, 2018. The purpose was to establish evidence-based review of social media and mobile money taxes. Results were collected both online and through face-to-face interviews across the country, gathering 3,015 responses.
The Sample
This public opinion survey produced a sizable sample with an observable demographic profile. 72% were residents in Central Uganda, 15% in Western Uganda, 8% in Northern Uganda and 5% in Eastern Uganda, with 93 districts represented overall.
Most surveyed respondents were between the ages of 18 and 35 (29% 18 – 24, 41% 25 – 30 and 15% 31 – 35). 74% of respondents were male and 26% were female. Most respondents were highly educated: 56% had obtained a Bachelor’s Degree, 14% a Master’s or PhD, 9% had Vocational Certificate, 15% completed Secondary School, 3% other, 2% had no education and 1% completed only Primary School.
Figures and facts on OTT Tax
96% of respondents had used social media in the past 6 months. This number dropped to 85% when asked if they had accessed social media since July 1st.
Of those who reported as using social media since the new tax was introduced: 40% said they paid the OTT tax. However, 57% were using VPN. 38% were using WiFi/Hotspot(s) and 3% selected “other”. Many used multiple methods.
Of those paying the tax, 86% paid for themselves, while 3% were paid by an employer, 3% by family, 3% by a spouse, 3% other and 2% paid for by a friend.
Respondents reported using the following social media platforms (selecting all that apply): 98% use WhatsApp. 92% use Facebook. 69% use Twitter. 62% use Instagram. 36% use LinkedIn. 30% use Skype. 24% use Snapchat. 21% use Google Hangouts. 12% use Telegram. 4% use Tinder. 6% “other” and 3% use 360 Chat.
Figures and facts on Mobile Money Tax
93% of respondents reported that they had used Mobile Money in the last 6 months. When asked how their Mobile Money use had changed since the implementation of the new tax, 4% reported that they were transacting more money in July. 2% were transacting about the same as before. 44% were transacting less money in July and 47% reported that they had completely stopped transacting Mobile Money after the implementation of the new tax.
Of the respondents who were mobile money agents, 36% reported that they had stopped transacting money in July. They suggested a significant impact on closure of these businesses.
When asked, “is the OTT tax on social media inconveniencing you,” 71% responded that they were “extremely” inconvenienced. 17% very much, 4% moderately, 2% slightly and 6% not at all. When asked whether Mobile Money tax inconvenienced them, 83% of respondents said that they were extremely inconvenienced. 13% very much, 2% moderately, 1% slightly and 2% not at all.
Asked, “do you support the social media ‘OTT’ tax”: 1% of respondents strongly supported the tax. 3% somewhat supported. However, 2% were undecided or neutral, 21% did not support and 73% strongly opposed.
When asked, “do you support the Mobile Money tax”: nearly 0% strongly supported the tax. 1% somewhat supported. 1% undecided or neutral, 19% did not support and 79% strongly opposed.
Download the full Survey here.
