Uganda Defends Introduction of Social-Media Tax After Outcry

KAMPALA (Capital Markets in Africa) – Ugandan authorities defended the introduction of a tax on users of social media such as Facebook and Twitter, saying the revenue is necessary to fund public services.

The daily levy equivalent to about 5 U.S. cents is “a small contribution of citizens towards the development of their country,” Minister of State for Finance David Bahati was quoted by the state-run Uganda Media Centre as saying on Tuesday.

East Africa’s third biggest economy on Sunday started charging users of platforms that also include WhatsApp and Viber in a step President Yoweri Museveni has said may bring in as much as 1.4 trillion shillings (about $360 million) per year and help bridge a budget deficit. Human-rights groups have warned it will stifle free expression in a country where more than 20 percent of the population live in poverty.

The Uganda Communications Commission, which regulates the industry, has been directed to block access to virtual private networks that some people have used to avoid paying the new tax, Bahati said. Uganda also introduced a 1 percent tax on all mobile-money transactions on Sunday.

Many Ugandan social-media users expressed discontent over the new tax on Twitter. The local Daily Monitor newspaper reported that five “concerned citizens” are among those petitioning the Constitutional Court to annul the levy.

The government on June 14 presented a 32.7 trillion shilling budget for the 12 months through June 2019, with a projected deficit of 6.2 percent of the gross domestic product.

Source:  Bloomberg Business News