We knew that the statements of 2018, as the loyal ICT Minister Frank Tumwebaze hadn’t done his due diligence, as the Ministry of Finance, Planning and Economic Development (MoPED) issued a Social Media Tax last year after President Yoweri Kaguta Museveni wrote a letter to the Ministry of Finance asking for the opportunity to tax this.
That has no been done over the last few months, but as the realization of the effects are coming. The forewarning of CSBAG and others wasn’t listen to. I wrote that it lacked due diligence of the tax in June 2018 and today. As I open Daily Monitor and seeing that Frankie Boy has changed his ways. He has opened his eyes and seeing what some of us saw all along. As the cost of content, the cost of using social media and that this has ensured that it is less viable. Since, its the elites who can use it, but the lower level civil servants cannot afford to be online. That was natural, that the 200 shillings per day would be taken directly of the plate and also evaporate funds for investment within the Republic. It is a negative tax, and therefore, naturally have reverse effect, than what the state promised when they levied it.
Tumwebaze statement in July 2018:
“When Ministry of Finance is borrowing, we, the Parliament and civil society are grilling them for borrowing. But when we say this is a sector that has grown in the economy so let’s get a bit of it, let’s get Shs. 6,000 from every holder of a smartphone consuming OTTs, what production capacity will it stifle?” (…) “Is USD 1,4 too much for a citizen to contribute to tax yet you have money to buy a smartphone, minimumly at Shs. 300,000 that is data enabled, and you load bundles of over shs. 30,000? Logically it doesn’t make sense” (Frank Tumwebaze, 17.07.2018).
Tumwebaze statemetn in January 2019:
“The committee chaired by Annet Nyakecho said Over The Top tax seems to negatively affect the consumption of ICT services and products. In response, ICT Minister, Mr Frank Tumwebaze admitted that the tax is has had adverse effects on the sector. He said they were “hoodwinked” by their counterparts in the Finance Ministry that the introduction of the tax on the basis that it would widen the country’s revenue base” (Ssebuliba, 2019).
ICT Minister Tumwebaze was so positive and thinking this was the future. This was how to widen the tax-base, but instead. It has as expected made the usage of Social Media expensive. Which means also there is lack of funds for the ones operating within the Social Media and making Online Businesses. This is both happening because of the hard hitting taxes on Social Media, but also the Mobile Money Tax. Both taxes has both the Mobile Money Industry and the ICT development, as they are both having less activity and less usage. Which is natural, when the costs are going up.
The ICT Minister should have known this before speaking so warm about it. Any tax are taking money out of the system. The 200 shillings of doom is clear. The state could have listen to the advice, but didn’t open the ears to it.
In June 30 2018, Daily Monitor reported this: “Civil society organisations have accused the government of trying to stifle debate online with this tax, while others like the Civil society Budget Advocacy group CSBAG, say the tax will have a negative impact on a business.” (Hinamundi, 2018).
So, if the ICT Minister Tumwebaze could have known and stopped this. They could have done the right thing and not continued this path. Instead they have hurt the industry, because they are all blindly following the orders of the President. That is what the state did and they levied the 200 shillings of doom, as it was anticipated by anyone else. Than, the authorities itself. Peace.
Samuel Ssebuliba – ‘Parliament orders assessment on impact of social media tax’ 18.01.2019, link: https://www.monitor.co.ug/News/National/Parliament-orders-assessment-impact-social-media-tax/688334-4940312-rph8g3z/index.html
Collins Hinamundi – ‘How government will collect the new social media tax’ 30.07.2018, link: https://www.monitor.co.ug/News/National/How-government-will-collect-new-social-media-tax/688334-4639596-juy8n3z/index.html
I wonder if Yoweri Kaguta Museveni ever listens to himself and his own advice. Because his own words so often are compelling to his own activity. Just like yesterday, he continues his rants of wisdom. This is something from the 32 years regime, who continues to pursuit their own game. It is nothing, that seems to stop them in their ways. They are just collecting whatever they can, even when there is no proof of doing any good by doing it. They are pushing taxes on the public, without giving service delivery back. They are just taxing them and making life harder.
President Museveni also spoke on surveillance of the Telecommunication Industry and use of Cellphone. Because he believes that the Companies are not paying their fair share. He is really proving his dictating ways and his micro-managing to the next level. He has the answers for more taxation and the answers to solve the lack of funds for the state reserves. Take a look!
“The third measure is electronic monitoring of telephone calls because the telecoms have been under-declaring their revenues. URA was depending on figures provided by the companies instead of independently monitoring them” (Museveni, 23.11.2018).
“Fourth, we must electronically monitor all money transfers. URA and BoU should do this. We recently started a tax on mobile money and social media. The mobile money tax was good because we had a large portion of people who are in non-monetary GDP.” (Museveni, 23.11.2018).
What is more worrying is that he wants to practically surveillance of the telecom industry. He wants to follow the airtime and cellphones, to check if the Telecommunication Companies are underwriting and lying on the usage of the telephone-services. This is furthering the opportunity of the state to follow and monitor the public, they will have the excuse to do so, by checking if the Airtel, MTN or other companies are telling the truth.
The last piece is that the President says the Mobile Money tax was positive, because it shown the amount of people who living in a non-monetary society. That the Mobile Money Tax are showing to what extent the public are living without bank-accounts and by direct cash services. That is why the Mobile Money has been important all over Uganda, because it has given people ability to pay over another platform, which wasn’t costly, but opening to transfer from instance family members in Kampala to the ones up-country.
Therefore, the Mobile Money tax has made it more costly and more of a bother. This hasn’t made it better, but made life harder. However, the President doesn’t see the good for the people, but the good for his spending in the State House. Which has grown by adding more taxes and not checking the consequences of doing so. Peace.
The Over The Top Services Tax and Social Media Tax can only be said as utter embarrassment by the National Resistance Movement (NRM). There are enough things to know this would happen, as the plan was for getting the revenue, but not thinking the consequences of the taxes. That is why, today’s revelations about the levied taxes isn’t that surprising.
Without due-diligence, it is hard to know the effects and the means for why it is put. It seems like the President and the NRM had a dream of cash-flowing into the Consolidation Fund without any consequences, but apparently it does. And when you add taxes on things, people either use less or plan more effortlessly to circumvent this added cost on their daily lives.
Daily Monitor Reports: “Government collected Shs20.5b from social media in the last quarter ended September, according to data obtained from Uganda Revenue Authority. The tax, which was implemented in July, was however, less than the Shs24.9b target that URA had hoped to collect in the period. URA has a monthly target of Shs8.3b. The tax was introduced in the Excise Duty amendments of financial year 2018/19 requiring all social media users to pay Shs200 per day, before accessing certain platforms such as Facebook, Whatsapp and Twitter, among others. Government intends to collect about Shs100b before the end of the 2018/19 financial year” (Christine Kasemiire – ‘OTT raises Shs20b in first quarter, URA fails on targets’ 07.11.2018).
While it is a few days ago, that the MTN Uganda promised the 24 hours since paying tax, that the tax would last from the time of payment of the tax until the time is spent. Instead of how it has been, until the new day coming. Meaning, that often you would only get half-a-day with the Social Media, as the taxation would start again, when the clock turns 00:01.
That is why this was news to: “Airtel Uganda and other telecom service providers have announced a fundamental change in the Over the Top excise duty imposed on social media following a directive from Uganda Communications Commission, the telecommunications regulatory body in Uganda. Since its introduction in July 2018, the tax commonly known as OTT or social media tax, was only valid up to midnight of the payment date for daily users. With the recent changes, daily subscribers can now enjoy internet services for a complete 24 hours – right up to the time that they subscribed 24 hours earlier. This also applies to the weekly and monthly users who can also enjoy services until the time that they subscribed” Brian Emorut – ‘Social Media tax validity to now last 24 hours’ 06.11.2018 – Guide 2 Uganda).
So now, Airtel and MTN has changed their pattern of getting the OTT tax. While URA is struggling to met the supposed the quota. This shows that the state had not considered all implications to the levied taxes. The NRM clearly didn’t envision, either the use of VPN and also that people cannot afford it. Because it is barrier to be even using the social media after the taxes.
Surely, the 24 hours usage and the lack of collection. That the Telecoms and the Mobile Money outlets has been pushed and lost revenue is certain. As the data-bundles and Air-Time had to be corrected from July on and also now the barrier for OTTs are changing again. This is surely showing that the Telecoms and the Republic wasn’t prepared for this, but doing it on orders from the President. Peace.
Today, it is revealed what the National Resistance Movement (NRM) Members of Parliaments (MPs) was promised on the 1st October at the Entebbe State House on the day before the second time voting for the newly enacted taxes, which are on Social Media and Mobile Money. Clearly, the President and his allies wanted to sweeten the juice, as they was promised some more money. Not that it was much.
“During the meeting, legislators (according to our source) were promised 15 millions each to vote “No” opposing the scrapping off of 0.5% as proposed by MP Wilfred Niwagaba last week when the bill had reached committee stage. In the vote, 164 MPs agreed to maintain the levy on mobile money while 124 voted to have it scrapped. A total of 288 legislators were present and voted” (Moses Namayo – ‘MPs promised Shs 15m each for vote to keep mobile money tax- Reports’ 03.10.2018, link: http://nilepost.co.ug/2018/10/03/mps-promised-shs-15m-each-for-vote-to-keep-mobile-money-tax-reports/).
I would have been thinking that the MPs would be more costly, if not their greed is making them cheap and Bosco knows it. As they are now accepting to get a small pickle push of 15 million shillings or $ 3,924 USD, which is less than 4,000 dollars each. When your hearing that, you surprised how little that is to keep a tax, which is hurting huge part of the population and also making every transaction more expensive. They are still making it expensive and costly for the public to takeout money through the mobile money. In a Republic where it is costly to even be ordinary banking.
That is why it weird and sad that these NRM MPs are that cheap, that Bosco can pay them off with only 4,000 USD or 15 million shillings. If you take it all collectively, there was a 164 MPs who voted for it and adding up. That would be a total 640m shillings or $167k USD. Which is not more worth than one 2018 Audi R8 Quattro, which costs $164,900. If a few more had voted for keeping the Mobile Money, than Bosco might have used the amount for an upgraded version: “The R8 Spyder convertible costs $177,100, and the more-powerful R8 Plus will cost about $194,400” (Cherise Threewitt – ‘ Cars That Cost $100,000’ 28.09.2018, link: https://cars.usnews.com/cars-trucks/cars-that-cost-100-grand).
So, the NRM MPs isn’t really that expensive, their ideals, their egos and their greed isn’t costing more than super Audi R8 Quattro. That is expensive enough for me to never in my life-time to touch it. But if someone should be bribed to sell out their constituents for a destructive tax. All done in favor of Bosco. The pay-off should be bigger, there should be enough for a car-park filled with Audi R8 Quattro’s. Not just selling out for one. I was disappointed, when the Age Limit pay-off, wasn’t costing more than one Aston Martin. Now it costed an Audi R8. Clearly, the NRM is still traded off for cheap. Peace.
Today I attended Parliament after some time, for the sole purpose of making our voice heard on the mobile money tax. The government has deliberately avoided a discussion on the social media tax!
Majority of the NRM Members of Parliament voted to maintain the mobile money tax. 164 MPs voted in favor of the tax while 124 of us voted to have it scrapped. I know that we are all disappointed but not surprised.
Once again, a majority of our elected representatives ignored the cries and pleas of the common person. I have made it clear to my colleagues that we must learn to side with the people or the people will despair. They cannot continue to further oppress the already oppressed citizens of this country.
I must appreciate all colleague MPs who voted for the removal of the tax. Special thanks to the many NRM MPs who defied the intimidation and voted with the people. From experience, we know that they will be persecuted for taking a contrary stand. But I know that the reward for doing what is right always outweighs any form of persecution.
Ultimately, all these things emphasise what I have been saying- our redemption will not come from anywhere else. It will come from us. We only need to realise that all power lies with us. If our own MPs, elected by us, cannot listen to us on anything, including redeeming us from exploitative taxes, then we must realise that WE ARE ON OUR OWN and work each day to liberate ourselves. No one else will do. Teli kuzikiza.