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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  1. 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 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.

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