Surprise: Uganda's New Social Media Tax Seems To Have Led To Fewer People Using The Internet, And Total Value Of Mobile Transactions To Drop

from the how-to-hobble-a-nascent-digital-economy-in-one-easy-move dept

Techdirt has been following the regrettable story of African governments imposing taxes and levies on Internet use. For example, Uganda has added a daily fee of 200 Ugandan shillings ($0.05) that its citizens must pay to access social media sites and many common Internet-based messaging and voice applications (collectively known as "OTT services"). It has also imposed a tax on mobile money transactions. When people started turning to VPNs as a way to avoid these charges, the government tried to get ISPs to ban VPN use. As we pointed out, these kind of taxes could discourage the very people who could benefit the most from using the Internet. And in news that will surprise no one, so it has turned out, according to official data from the Uganda Communications Commission, summarized here by an article on the Quartz site:

In the three months following the introduction of the levy in July 2018, there was a noted decline in the number of internet users, total revenues collected, as well as mobile money transactions. In a series of tweets, the Uganda Communications Commission noted internet subscription declined by more than 2.5 million users, while the sum of taxpayers from over-the-top (OTT) media services decreased by more than 1.2 million users. The value of mobile money transactions also fell by 4.5 trillion Ugandan shillings ($1.2 million).

Given the timing, it seems likely that it was indeed the newly-introduced levy that caused the number of Internet users in Uganda to drop dramatically, and the mobile phone-based economy to contract. Neither is good for the people of Uganda, its economy or its government. It's clearly time for the Ugandan authorities to rescind the tax before too much long-term damage is caused -- and for other African nations with ill-advised Internet levies to do the same.

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Filed Under: internet, internet tax, social media, uganda


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  • icon
    That Anonymous Coward (profile), 25 Feb 2019 @ 8:05pm

    The Goose & the Golden Egg

    There was once a Countryman who possessed the most wonderful Goose you can imagine, for every day when he visited the nest, the Goose had laid a beautiful, glittering, golden egg.

    The Countryman took the eggs to market and soon began to get rich. But it was not long before he grew impatient with the Goose because she gave him only a single golden egg a day. He was not getting rich fast enough.

    Then one day, after he had finished counting his money, the idea came to him that he could get all the golden eggs at once by killing the Goose and cutting it open. But when the deed was done, not a single golden egg did he find, and his precious Goose was dead.

    Those who have plenty want more and so lose all they have.

    Remember when we taught children fables to help them understand things...

    reply to this | link to this | view in chronology ]

    • identicon
      Idi Amen, 26 Feb 2019 @ 12:21am

      Re: The Goose & the Golden Egg

      What's good for the goose is good for Uganda.

      reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 26 Feb 2019 @ 1:09am

      Re: The Goose & the Golden Egg

      Apt. A child could outwit the Ugandan government using nothing more than the morals of old fairy tales.

      And for the more modern audience there's stuff like "A World of ends" which describes just why it isn't sensible to try to earn money by penalizing people out of access to any given market.

      reply to this | link to this | view in chronology ]

  • icon
    Gary (profile), 25 Feb 2019 @ 9:19pm

    Regressive

    Isn't that what always happens when you raise the tax on the segment least able to afford it?

    So what does a banana cost, ten dollars? What's the big deal.

    reply to this | link to this | view in chronology ]

  • icon
    PaulT (profile), 26 Feb 2019 @ 12:09am

    "Neither is good for the people of Uganda, its economy or its government"

    Well, that does depend on what the actual motive was. If it was pure profit it's a bad move. If it was to stop people using online services for political or protectionist reasons, it's worked as intended for the government.

    reply to this | link to this | view in chronology ]

    • icon
      Scary Devil Monastery (profile), 26 Feb 2019 @ 1:12am

      Re:

      "If it was to stop people using online services for political or protectionist reasons, it's worked as intended for the government."

      Given the taxed amount that's unlikely though. I think Hanlon's Razor must apply - the Ugandan government was simply being incompetent.

      I'd point and laugh, but as a european that's hard to do with article 11 and 13 hovering in the background as a sterling example of why we have no leeway to look down at anyone elses government any longer.

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 26 Feb 2019 @ 2:25am

        Re: Re: Fuck Hanlon's razor

        Ignorance is such stupid cop out for our governments and our enemies, I'm done accepting it as a real thing for anyone who's not us. They are malicious and evil to the very core with rotten hearts and rotten minds. Anyone who is doing something to harm the internet, either by taxing internet use, repealing net neutrality, or by forcing upload filters and link taxes knows exactly what they are doing. They are trying to pull the plug on the internet and put an end to the information age as a means to crack down on opposition and dissent. Do not believe anything the supporters of these, the "not us", say, because everything they say is a blatant lie unless they admit exactly what they're doing.

        reply to this | link to this | view in chronology ]

        • icon
          Scary Devil Monastery (profile), 26 Feb 2019 @ 3:12am

          Re: Re: Re: Fuck Hanlon's razor

          "Do not believe anything the supporters of these, the "not us", say, because everything they say is a blatant lie unless they admit exactly what they're doing."

          That's well beyond the tinfoil hat territory...

          Hanlon's razor applies for several reasons:

          1) We have allowed a body politic to emerge where the successful applicant in any endeavor will be an antropomorphic personification of the Dunning-Kruger effect with the spine of a soggy noodle, the moral fortitude of wet cardboard, and the principles of a bobbit worm.

          2) Said applicants and the bureaucracy surrounding them are unlikely to be held responsible for the shit which hits the fan a year after they're out of that role or office, so they don't need to care about most consequences.

          We could describe this as malicious but it certainly isn't over an agenda of control, but mainly because most of them will accept any amount of collateral damage as long as it means they can preen in the public eye while tossing out some catchy strong-man slogan rather than having to spend effort actually trying to understand the ramifications of the decisions they're making.

          reply to this | link to this | view in chronology ]

          • identicon
            Anonymous Coward, 26 Feb 2019 @ 5:38am

            Re: Re: Re: Re: Fuck Hanlon's razor

            Willfull ignorance is still willfull and should be treated as actual malice. "I didn't expect someone to die when I shot him in the head with a rifle" is not an excuse for anyone /capable/ of sufficient mental capacity.

            reply to this | link to this | view in chronology ]

      • icon
        PaulT (profile), 26 Feb 2019 @ 3:17am

        Re: Re:

        "Given the taxed amount that's unlikely though"

        That depends on what the actual intention of the tax was. If the aim was to get more money, they failed. If the aim was to use taxes to stop the internet from being an attractive form of communication for the poor and lesser educated while not blocking the more wealthy and educated classes, it succeeded.

        Of course, the option remains that they really did just destroy their own income in a botched attempt to increase it, sometimes an outward display of incompetence is indeed just proof of nothing more than incompetence. I'm no conspiracy theorist, but you can't always take these things at face value.

        reply to this | link to this | view in chronology ]

      • identicon
        ANON, 26 Feb 2019 @ 6:51am

        Tanzania

        I think Tanzania also implemented a tax- a blogging fee on anyone who posts to social media. The intent was specifically to go after those who posted critical comments about the government, trying to hide in the anonymity of the internet. Now the government can chase the ISP's to identify those posting and then prosecute them for failing to pay the equivalent of an average year's wage to the government for the privilege of posting (and being monitored) on the internet.

        Not incompetence - targeting the necessary, and collateral damage be damned.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 26 Feb 2019 @ 12:46am

    If you are traveling there, just set up a VPN on your home computer, before you go, and then use than when you are in Uganda, to avoid the tax while you are there. They will only known you are making an encrypted connection to your home computer.

    And that is handy when travelling the world. When I used to run an online radio station, and would travel to do my own homebrew broadcasts of sporting events, especially figure skating and tennis, I would have my own VPN on my home computer set up to avoid any local censorship, especially in China, Qatar, or the UAE. The only thine the authorities in those countries would know is that I was connecting to my computer at home, but would know what I was up to.

    It also allowed me to bypass geo restrictions to access my SiriusXM subscription when I was travelling outside the United States. And that did not break any laws when I did that, anywhere in the world. I was paying for my SiriusXM subscription, so I was not breaking any laws to access their website when outside the United States.

    I used to run the station from Australia, when I travelled there, I did not break either Australian law, or US laws, when I bypassed the geo restrictions, using my private VPN, to access SirusXM or iHeart, from Australia.

    reply to this | link to this | view in chronology ]

    • identicon
      Cho Seung-Hui, 26 Feb 2019 @ 2:14am

      Re:

      no need to visit Africa to check VPN blocking. My ISP in peru is tricking VPN due to it's own sponsored data business and exploits it leaves.

      ISP lobbyists was helped with NDI to push laws in favor of this shit

      reply to this | link to this | view in chronology ]

      • identicon
        Anonymous Coward, 26 Feb 2019 @ 5:16am

        Re: Re:

        However, only commercial VPNs would be blocked. Your own VPN on your home computer would not, and there is a way to get around blocking of your VPN on your home computer, I used to do to circumvent Taco Bell's blocking of VPN

        What I did was first sign on to the SSL proxy on my home computer, and they would log onto my full VPN using the internal address of 192.168.1.2 on my home network, instead of the public IP address. When I did that, Taco Bell's system would let me connect to my VPN, whereas using the normal exteranal IP address did that. That was a flaw in their firewall. One made the SSL connection to my SSL proxy, I could use that internal address to access the VPN on my home network, and their firewall would let it through, because firewalls typically do not filter anything on 192.168.x.x, becuase those are internal addresses and firewalls ignore those

        And exploiting that flaw at my local Taco Bell franchaise did not break either California law, any Federal laws. Circumventing their VPN blocking, using the flaw I discovered, did not break either California (where this franchaise was located) law, or any Federal laws.

        reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 26 Feb 2019 @ 1:08am

    Anyone else surprised they didn't know the way?

    reply to this | link to this | view in chronology ]


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