- July 17, 2018
- Posted by: secretariat
- Category: ICTAU Updates
Introduction
On Friday the 1st of June, 2018, the Parliament of Uganda passed a 32.4 trillion shilling 2018/2019 budget. It included a new 200 shilling (~0.05 USD) tax “per user per day of access” on “over the top services” (OTTs) previously known by the general public as social media. The same budget introduced an additional tax on mobile money transactions “of receiving, payments and withdrawals” valued at 1% of the value of these transactions.
These taxes came into effect at 12am on the 1st of July, 2018. Many Ugandans found themselves instantly blocked from accessing WhatsApp, Facebook, Twitter, LinkedIn and other OTT services, and others were shocked to realize that increasingly popular mobile money payments had increased in price.
These developments were followed by countless public statements in opposition and in favour of the new taxes, including one opposing the taxes by the ICT Association of Uganda (ICTAU) released on July 4th, and two missives released by President Museveni on July 4th and 12th. A group of activists filed a petition in the Constitutional Court seeking nullification of the OTT tax the following Monday. A campaign using the hashtag #ThisTaxMustGo held a demonstration against the taxes on July 11th. This series of events dominated the headlines and talk shows in Uganda and attracted the attention of international media, as well as industry stakeholders and policy makers around the world.
On July 11th, Ugandan Prime Minister Ruhakana Rugunda announced that the Government of Uganda would review these taxes. On July 13th at 7pm, Whitehead Communications released a survey to gather public opinion on the impact of the taxes in order to contribute a resource for evidence-based research in their review. The survey was closed at 5pm on July 16th, collecting 2,918 responses (after data clean) and generating the following data for free use by the public at large. You are welcome to build on these findings, which we have released quickly.
Executive Summary
The Uganda Social Media and Mobile Money Taxes Survey – a public opinion survey on the impact of new taxes on social media and Mobile Money – was conducted by Whitehead Communications in Uganda between the 13th to 16th of July, 2018, with the purpose of serving as a resource in a consultative and evidence-based review of social media and mobile money taxes. Results were collected both online and through face-to-face interviews across the country, gathering 3,015 responses (more on the methodology and sample in the full report). This report has been expedited to be released within 36 hours of closing the survey in order to provide timely information to policy makers, concerned parties and the general public.
This public opinion survey produced a sizeable sample with an observable demographic profile. 72% were resided in Central Uganda, 15% in Western Uganda, 8% in Northern Uganda and 5% in Eastern Uganda, with 93 districts represented overall. Most surveyed respondents were between the ages of 18 and 35 (29% 18 – 24, 41% 25 – 30,15% 31 – 35). 74% of respondents were male and 26% were female. Most respondents were highly educated: 56% had obtained a Bachelor’s Degree, 14% a Master’s or PhD, 9% had Vocational Certificate, 15% completed Secondary School, 3% other, 2% had no education and 1% completed only Primary School.
A wide diversity of occupations were represented, including: agriculture, arts and entertainment, business and trade, education, entrepreneurship, Fintech, health, ICT, law, manufacturing, marketing and communications, Mobile Money, NGOs, public service, students, travel and tourism, transportation and many others.
The survey included many questions about the use of social media (OTTs) in Uganda. 96% of respondents had used social media in the past 6 months. This number dropped to 85% when asked if they had accessed social media since July 1st. Of those who reported as using social media since the new tax was introduced: 40% said they paid the OTT tax; 57% were using VPN; 38% were using WiFi/Hotspot(s) and 3% selected “other”; many used multiple methods. Of those paying the tax, 86% paid for themselves, while 3% were paid by an employer, 3% by family, 3% by a spouse, 3% other and 2% paid for by a friend. Respondents reported using the following social media platforms (selecting all that apply): 98% use WhatsApp, 92% use Facebook, 69% use Twitter, 62% use Instagram, 36% use LinkedIn, 30% use Skype, 24% use Snapchat, 21% use Google Hangouts, 12% use Telegram, 4% use Tinder, 6% “other” and 3% use 360 Chat.
The survey also gathered insights on the state of e-commerce in Uganda. When asked what kind of business respondents conduct online, they replied with a wide variety of industry sectors, including: agriculture, art, automotive sales, bakery, beauty products, clothing and shoe sales, consultancy, counseling, data entry, electronics, event promotion, fashion, forex, graphic design, law, marketing, medical, music promotion, photography, shopping, social media influencing, telecommunications and phone sales, travel and tourism promotion, web applications development, among many others. 8% of our sample was made up of Mobile Money agents, amounting to 197 respondents.
Respondents also indicated how they use social media productively, including: communicating with colleagues and clients, customer service, employment searches, online meetings and planning, research and development, publishing, sending and receiving documents, tendering proposals, international trade and other activities.
The survey also provided insights into Mobile Money use in Uganda. 93% of respondents reported that they had used Mobile Money in the last 6 months. When asked how their Mobile Money use had changed since the implementation of the new tax, 4% reported that they were transacting more money in July, 2% were transacting about the same as before, 44% were transacting less money in July and 47% reported that they had completely stopped transacting Mobile Money after the implementation of the new tax. Of the respondents who were mobile money agents, 36% reported that they had stopped transacting money in July, suggesting a significant impact on closure of these businesses.
Respondents were asked about the impact of the new Mobile Money tax on their businesses. 2,334 respondents offered their answers, which fell into the following thematic groups: delayed payments, general inconvenience, increased cost of doing business, increased risk, loss of income, reverting to banking and cash payments.
Those conducting business using social media were asked about the impact that the OTT tax had on their livelihoods, and 1,640 people offered responses on how they had been affected, revealing the following trends: delays in conducting business, disrupted payments, general inconvenience, increase in the cost of doing business, loss of income, reduced access and a smaller online audience.
When asked, “is the OTT tax on social media inconveniencing you,” 71% responded that they were “extremely” inconvenienced, 17% very much, 4% moderately, 2% slightly and 6% not at all. When asked whether they were inconvenienced by the Mobile Money tax, 83% of respondents said that they were extremely inconvenienced, 13% very much, 2% moderately, 1% slightly and 2% not at all.
When asked, “do you support the social media ‘OTT’ tax”: 1% of respondents strongly supported the tax, 3% somewhat supported, 2% were undecided or neutral, 21% did not support and 73% strongly opposed.
When asked, “do you support the Mobile Money tax”: nearly 0% strongly supported the tax, 1% somewhat supported, 1% were undecided or neutral, 19% did not support and 79% strongly opposed.
When asked for their opinion on taxes in Uganda, 2459 respondents offered their views. Several themes were observed, including: accountability, double taxation, financial inclusion, misuse of tax funds, over taxing, poor planning and the taxation method of implementation.
We invite the relevant decision makers to review the detailed results of this survey in full, particularly respondents’ written replies to the questions: how they are using social media for wealth creation; how their businesses have been affected by the new taxes on social media and mobile money; and the public’s opinions on taxation in general. Furthermore, we encourage thorough consultation among all parties going forward to ensure an informed and equitable solution.
Download the full report here.
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