In the past, I’ve joked about Congress imposing a tax on text messages and email, but a tax on social media is no joke: It’s happening in Uganda. On May 30, 2018, the Uganda Parliament approved a tax on access to over the top (OTT) services on Telecommunications Service Operators, more commonly referred to as the use of social media.
The tax of 200 Uganda shillings per day – the equivalent of just over a nickel a day in the United States – is targeted to those who use social media platforms like Facebook, Twitter, and WhatsApp and was effective as of July 1. The annual cost works out to 73,000 shillings ($19 US). To put that in perspective, a 2017 study by the Uganda Bureau of Statistics (Ubos) found that the average annual income is about 4,992,000 Uganda shillings ($1,287 US).
The purpose of the tax is ostensibly to raise revenue, but critics argue that it is an attempt by President Yoweri Museveni, who has served as President since 1986, to squelch criticism of his policies. Museveni has previously spoken out against those who use social media to spread “lugambo” (gossip) which he described as “opinions, prejudices, insults [and] friendly chats.”
The tax, which is imposed on “voice and messaging over the internet” must be paid before users can access social media sites. Notices have already gone out to consumers:
To get around the tax, some users are connecting to websites via a Virtual Private Network (VPN) connection. By using a VPN, a user can connect to a server in a different location, making it appear that the user is in the same area as the server rather than where they actually are. So, if a user in Uganda connects to a VPN in, say, the United States, it appears that the user is connecting from the United States.
Legal efforts to stop the enforcement of tax have already started. A petition in protest of the tax has been filed with the Constitutional Court of Uganda. Daniel Bill Opio, a tech lawyer and Executive Director of Cyber Law Initiative, a nonprofit organization focusing on the interaction of technology with the law, has rallied a team to petition the court. According to Opio, the government has pushed the tax by arguing that it “will reduce rumors or idle talk by Ugandans online.” Opio says, in response, that “[w]e have issues with that tax because it’s discouraging net neutrality, open access to internet and violates quite a number of rights and freedoms such as freedom of expression under Article 29 of the 1995 Ugandan Constitution among others.”
Opio and his fellow petitioners are asking the court to declare the law unconstitutional. In his affidavit filed with the court, Opio notes that:
social media platforms such as; Twitter, YouTube, Facebook, WhatsApp Messenger, Instagram and others have revolutionized every aspect of human endeavor through democratization of internet, and online information access, and digital expression through various online fora.
He further argues that:
the same rights that people have OFFLINE like freedom of expression and access to information must also be protected ONLINE, regardless of media of one’s choice.
You can read the petition, as filed, here (downloads as a pdf).
Silver Kayondo, a lawyer focusing on legal and regulatory mandates for emerging technologies such as financial technology (fintech), blockchain, and artificial intelligence (AI), is also a petitioner in the matter. Like Opio, his primary objective is to nullify the OTT tax, and make the Court order the Uganda Communications Commission (UCC), the Telecoms sector regulator to enact Regulations for OTTs so that they can pay the tax directly to the Ugandan government. Kayondo says that “Regulations should also address quality of service, skills transfer, local content, consumer protection, technology transfer, rural infrastructure development, dispute resolution, etc.”
In his affidavit filed with the court, Kayondo argued that the taxation of these services “will lead to geo-blocking and/or throttling of OTT services thus offending the “open internet” principle, which is a fundamental network neutrality principle set by internet standard setting agencies like the Internet Engineering Task Force (IETF) and the Internet Society (ISOC), which require information across the World Wide Web (WWW) to be equally available to all users without variables that impede equal access, digital inclusion, open web and application/app standards, and democratization of the internet.” He called the tax “arbitrary, harsh and oppressive to the double-taxed Ugandan consumers of OTT services at the expense of OTT companies that earn billions of revenue globally from providing OTT services.”
Opio is aware of the role that politics can play in these kinds of cases but he remains optimistic, telling me, “I believe we will win the case.” The fight, however, is far from over. The next step, he says, is to get a hearing date, which he hopes to have before the close of the week. Kayondo explained that they will ask for an expedited hearing since the case “raises matters of great public interest.”
The petitioners are gearing up for what is sure to be a challenging legal fight. Opio acknowledges that courts have been reluctant to take up such matters, hiding under what he calls the “political question doctrine” but he doesn’t think this will be the outcome here. Kayondo agrees, noting that even members of Parliament are backtracking on the tax as the various unintended consequences are becoming clear.
Opio says that there are advocacy plans to push the cause further. As part of the effort, Cyber Law Initiative has set up a trust fund to help with their case: You can find it here. For more, you can follow their progress on Twitter @Cyber__Line. The social media hashtag for the movement is #ThisTaxMustGo.