NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Monday, March 4, 2019

By Rebecca Ratcliffe and Samuel Okiror

Millions of people in Uganda have abandoned social media after punishing taxes were imposed on the use of networking sites and on money transactions using mobile phones.

A daily levy, introduced in July to tame “idle talk” online and raise revenue, affects more than 60 online platforms including Facebook, WhatsApp and Twitter. To use such sites, Ugandans are expected to pay a tax of 200 Ugandan shillings (4p) a day.

In the three months following the introduction of the levy, the number of internet subscriptions to such services fell by more than 2.5 million, according to the Uganda Communications Commission. Fears have been raised over the impact on the economy.

At the time the tax was imposed, David Bahati, Uganda’s finance minister, said the legislation aimed to raise revenue for public services. However, the president, Yoweri Museveni, wrote to the finance ministry in March urging the introduction of the tax as a way to deal with the consequences of online “gossip”.

Photo courtesy of Fiona Graham/WorldRemit.