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09Aug

Data Protection in Africa in the Age of Covid-19

Author CIPESA Writer Posted on

By Boel McAteer and Jean-Benoît Falisse |

As the Covid-19 pandemic spread around the world in the early part of 2020, governments and companies invested substantial resources in gathering data about suspected and confirmed cases, and related behaviours. Learning more about how the virus was spreading was a top priority around the world, and with this came new practices of sharing medical records, tracking people’s movements and tracing their contacts. This has created new norms for data governance in many countries, and in this brave new world of disease surveillance, it is more important than ever to understand data protection and privacy, and where these concepts fit in with the new priorities of managing the pandemic.

The Covid Governance research project has gathered information about country-level data protection and Covid-19 practices across the world. Covering over 200 countries and territories, the project’s Data Protection Explorer Tool provides a snapshot of the legal environment surrounding data protection and privacy, and how it is changing in response to Covid-19. Crucially, it focuses on restrictions on data collection, processing and cross-border transfers.  It also captures digital monitoring measures in place for Covid-19, such as contact tracing, and who owns that data. This will help form a picture of what has changed within data ethics and surveillance during the pandemic, and in the long term what those changes might mean.

So what are some of the key patterns that we can see so far? A joint statement on Data Protection and Privacy in the Covid-19 Response from a number of United Nations (UN) organisations states that any changed practices due to Covid-19 should be legalised and rooted in human rights. However, the information collected via the Data Protection Explorer Tool shows that about a third of Africa’s 54 countries did not have comprehensive data protection laws enforced or in place before the pandemic. During the pandemic, constitutional rights have often been backtracked as a part of the crisis response.

 The Explorer’s data also shows that African countries without specific data protection laws are particularly exposed. Take Namibia for example, whereas no comprehensive data protection law inlaw is in place.  – there is, however, a draft bill in the works and public consultations were conducted in 2020. In the absence of a dedicated data protection framework,  t does not mean data protection is inexistant: as in other African countries, there are provisions in other Namibian laws related to personal data of citizens in specific sectors of the economy such as accounting and  banking (the Banking Institutions Act, 1998 and 2010 amendment) or the legal professions and accounting (Legal Practitioners Act, 15 of 1995 as amended).

The right to personal privacy is also enshrined in Namibia’s constitution as a human right, but this right is limited including in the interests of health and public safety. This allows the government to legally prioritise public health over other human rights throughout the pandemic. Indeed, when Namibia declared a state of emergency in March 2020, many constitutional freedoms were temporarily suspended. For instance, access to education could not be guaranteed anymore and places of worship (constitutive of religious freedom) were closed.

Covid-19 tracing and surveillance mostly occurred offline but the University of Namibia (UNAM) successfully launched a mobile app, named “NamCotrace”, that collects substantial personal information such as the geolocation of users. The app is connected to epidemiological data and the national healthcare system in real time. Whereas it is alleged that “privacy by design” is core to the app, Namibia’s prevailing privacy and data protection legislative environment leaves room for arbitrary abuse. Similarly, Nigeria has developed various Covid-19 apps but with minimal data protection legal safeguards in place, there is ample room for misuse.

The Data Protection Explorer Tool also shows that countries with data protection laws remain vulnerable too. In many instances, the laws have been amended to allow practices that were previously prohibited to take place during the pandemic. In South Africa for instance, the response to Covid-19 has been governed through the Disaster Management Act from 2002 that allows the National Disaster Management Centre to request from individuals or organs of state information it “reasonably requires” and to escalate the matter to parliament in case of failure.

In April 2020 a regulation was introduced to legalise contact tracing in South Africa. This created a tracing database of Covid-19 cases, managed by the National Department of Health, where personal information is gathered from anyone tested for Covid-19. Information collected and stored in the database includes name, residential address, ID and passport number. This means that even though the information is collected legally without consent from the individuals, it would be unlawful to use that data for any other purpose than the one specified in the regulation. Despite these provisions, concerns have been raised that the contact tracing enables government surveillance of the population, since the Director General of Health can track the location of anyone suspected to have Covid-19 through phone service providers.

At the other end of the continent, Iin West Africa’s Burkina Faso, the data protection law prohibits collection of personal data relating to health. It had not, at the time of writing, been amended. However, since 2019, a digital platform for health surveillance has been  is in place.: One Health is funded by USAID and combines data from three ministries concerned with zoonotic disease control.  in the same place. When the first cases of Covid-19 were detected in the country in 2020, however, the platform was adapted to include data on the new virus, tracing cases, and their contacts. This is, obviously, raising privacy (and legality) concerns.

There are also some inspiring examples. The B’Safe app in Botswana was developed as an alternative to a manual Covid-19 tracing system. Described as privacy-friendly and in line with the country’s data protection (and privacy) law that pre-dates the pandemic, the app recorded a decent initial adoption rate. However, without an established data protection authority to enforce the law and oversee the app’s roll out, security vulnerabilities within the app led to private citizens lodging a court case against the country’s Covid-19 task force challenging the apps  its safety. The progress of the case remains unclear to-date. However, it highlights the importance of independent data protection authorities, good examples of which include in Angola and Senegal, and the pandemic potentially being a decisive push in countries where they are yet to be established.

Where are we heading now? Data protection laws in Africa were rapidly developing in the years leading up to the pandemic, with many new laws influenced by the European Union’s General Data Protection Regulation (GDPR) which was adopted in 2016. The examples above show the many ways in which the data protection environment in Africa is changing with the pandemic.

As the general state of democracy and freedoms is deemed to be worsening since the outbreak of Covid-19, it will be important to continue to monitor developments in data protection and privacy: the pandemic could be the opportunity to speed up the process of establishing much-needed laws and enforcement agencies but it could also lead to them being less protective of citizens (and more permissive for government) than in the pre-Covid-19 world.

The Covid Governance Project is an initiative of the University of Edinburgh. It was developed with support from the Foreign Commonwealth and Development Office (FDCD), the Global Challenges Research Fund – Scottish Funding Council, and the University of Edinburgh’s Challenge Investment Fund. Explore the Data Protection Explorer Tool.

29Jul

CIPESA Supports Impactful Digital Rights Media Advocacy in Africa

Author CIPESA Posted on

By Apolo Kakaire |

Civic space continues to shrink across Africa. In recent years, disruptions to the internet and social media applications have emerged as a common trend of digital repression especially in authoritarian countries in Africa. While the Covid-19 pandemic has reaffirmed the immense importance of digital technologies for government and citizen interactions, public services provision, employment, education and commerce, some governments on the continent used the pandemic as an excuse to impose further clampdowns.  

For full realisation of the potential of digital technologies to transform society and economies in Africa during the pandemic and beyond, there is need for continued advocacy to uphold and protect freedom of expression, access to information, and equitable participation online. 

It is against this background that between July 5-9, 2021, the Collaboration on International ICT Policy for East and Southern Africa (CIPESA) in partnership with the African Centre for Media Excellence (ACME) conducted an intensive training course on Digital Rights and Impact Communication for grantees of the Africa Digital Rights Fund (ADRF). The ADRF was launched in April 2019 to offer flexible and rapid response grants to select initiatives in Africa to implement activities that advance digital rights, amidst rising digital rights violations.

The training  equipped civil society organisations (CSOs) with skills, knowledge and tools to effectively communicate digital rights issues and inspired them to approach communication systematically so as to increase the visibility of digital rights issues in different media and to promote public discussion on digital rights issues.

According to Ashnah Kalemera, the Programme Manager at CIPESA, “the training was the result of the realisation that organisations working in the digital rights arena have inadequate skills to effectively and proactively engage the media and to conduct effective public communications.” She added that, as a consequence of this skills gap, “digital rights issues are poorly covered, commonly with limited depth and sensitivity.” 

“Digital rights are a fairly new area of interest, so it is prudent that CSOs working in this space are skilled in pitching appropriate messages in clear language and in making concrete calls to action, especially given that the media is not well-versed or always keen on this subject,” said Kalemera.

The training was preceded by a capacity and training needs assessment which established ADRF grantees’ preeminent training needs as using social media as a tool of influence, communicating research and hard-to sell-subjects, and developing media advocacy strategies. The findings of the assessment informed the development of the curriculum and training resources featuring a mix of trainer-led discussions, experience sharing, case studies, guest lectures, plenary discussions and assignments. 

Sessions during the training included on topics such as Impactful communication and Advocacy, which was led by ACME’s Executive Director, Dr. Peter Mwesige; and Civil Society Relations: Breaking the Barriers, a lecture by Daniel Kalinaki, General Manager, Editorial Nation Media Group in Uganda.  John Baptist Imokola and Dr. Gerald Walulya, both lecturers at Makerere University’s Department of Journalism and Communications, alongside Agnes Tumuheire, Content Manager at Ultimate Media Consults, led the sessions on Communication Planning,  Communicating/ Disseminating Research and Hard-to-Sell Subjects, and Taking Advantage of the Power of Digital/Social Media, respectively.

The 25 trainees, who included the executive leadership, programme and communications officers from ADRF-supported organisations operating in Cameroon, Côte d’Ivoire, Democratic Republic of Congo (DR Congo), Ghana, Kenya, Rwanda, Somalia, Somaliland, Tanzania, Uganda and Zimbabwe, worked to develop internal communications strategies and drafted campaign materials.

Experience from such communication-related training shows that having the right mix of senior staff and implementers from an organisation is a prerequisite for success. Communication being a management function, it helps that the key decision makers share the same vision, outlook and attitude to communication with those that handle the day-to-day communication functions. 

Select participant testimonies“I was very interested in understanding how the media works.  Since I don’t have experience working in media houses, it was a good opportunity to discuss how to engage with the media.” Blaise Ndola, Rudi International – DR Congo.

“I am happy to have participated in this training. The delivery method was well thought-through, the materials were easy to access and understand and the mentors were amazing. Many important questions were answered as a result of this training. [I am] grateful for the opportunity to learn from experts in those fields!” Ayaan Khalif, Digital Shelter – Somalia.

“What l really enjoyed were mostly issues to do with how communities have to embrace digital rights so that they see the benefits that come with digital rights, and the roles CSOs have in ensuring our communities are aware of their rights. And also on issues of media relations strategies how best to come up with a working strategy for the diverse communities we serve.” Michelle N. Q Mulingo, Zimbabwe Centre for Media and Information Literacy (ZCMIL).

Going forward, digital rights advocacy CSOs would benefit from investing in the journalism they want to see. Possible avenues include offering reporting grants to facilitate higher quality research than that done by journalists through media houses’ limited resources.  Follow ups with the trainees/grantees is also necessary to ensure application of acquired skills and knowledge. Moreover, given the fairly high staff attrition rate in CSOs it would be useful to regularly conduct these kinds of training if impact communication is to gain traction in the digital rights arena.

28Jul

Digital Taxation Doing More Harm than Good for Access and Rights in Africa

Author CIPESA Posted on

By Evelyn Lirri |

When Uganda introduced a tax on social media use in 2018, the government hoped the new source of revenue would help widen the country’s tax base. Instead, internet subscriptions fell drastically and the government did not raise the anticipated revenue as most users turned to Virtual Private Networks (VPNs) to access social media platforms. 

Three years later in July 2021, Uganda abandoned the levy on social media access and instead introduced a 12% tax on internet data. Still in its early days, the effects of the new tax are yet to be seen. Nonetheless, like its predecessor, the tax is likely to affect internet access, the country’s fledgling digital economy, and digital civic space. 

Yet Uganda is not alone in the growing trend of digital taxation. From South Africa in the south, Kenya and Tanzania in the east, through to Nigeria in the west, as the Information and Communications Technology (ICT) sector grows across the African continent, several countries are turning to the sector as a target for new revenue streams.

But there appears to be no stakeholder consensus on digital tax rules, with activists, economists, technologists and innovators at loggerheads with tax bodies and communications regulators on how to overcome economic downturns while driving digital transformation and upholding digital rights.   

This balancing act formed the basis of a recent workshop on the impact of digital taxation on digital rights in Africa organised by the Collaboration on International ICT Policy for East and Southern Africa (CIPESA). The workshop brought together 66 participants from across the continent and beyond to deliberate on good digital taxation practices and the impact of taxation on users and national ecosystems. The workshop featured perspectives from platform operators, national and regional regulatory bodies, tax authorities, and policy makers. 

Speaking at the workshop, Professor H Sama Nwana, a technology and telecommunications consultant affiliated with the UK-based Cenerva, said digital taxes in various forms are not only regressive, they disenfranchise poor and marginalised groups such as women and the youth. “If you apply a flat tax, it is going to affect the less privileged and people who need the internet the most, such as women in rural areas. The social media tax in Uganda impacted some of the poorer provinces more than people in urban areas such as the capital Kampala,” he explained.

According to Nwana, countries which have introduced digital taxes have registered a subsequent decline in the number of people accessing and using the internet and other ICT-related services, ultimately leading to less revenue generated for the government. “This is paradoxical because when you try to drive up your tax revenue by putting up more taxes onto the system, people stop using data services to transact or carry out other businesses such as agriculture and financial services,” said Nwana.

Access to affordable internet is still a challenge for many across the continent. With just over a quarter of the population online, additional costs including taxes deepen the affordability challenge. Indeed, as the Alliance for Affordable Internet (A4AI) Africa Regional Coordinator Onica Makwakwa argued, “taxes that are passed on to consumers further burden those who are already struggling with the cost of access” and it is thus crucial to “guard against over-taxation” especially in light of the Covid-19 pandemic which has made the need to be connected and have access to affordable internet even “more urgent”. 

“What we have in Africa is an affordability and accessibility gap which needs to be closed,”  said Dr. Christoph Stork, a telecommunications expert with Research ICT Solutions. “To be able to provide e-services such as health, education and fintech, we need increased connectivity. ICT taxes make these services either too expensive or less attractive to invest in.”

Taxation, according to Stork, should be broad-based, easy to enforce, provide incentive for competition and investment, and be progressive. “The [Uganda] Over the Top Services (OTT) tax, for example, is regressive because everyone pays the same amount regardless of whether they are rich or poor. These kinds of taxes in general prevent the poor from participating in tomorrow’s internet society,” Stork said. 

Reducing or eliminating sector-specific taxation therefore becomes critical to encourage investment in mobile connectivity, improved affordability, increased uptake, and ultimately, economic growth.

The CIPESA Programme Manager, Ashnah Kalemera, cited the example of Chad, a country with one of the lowest internet and mobile penetration rates on the continent and a history of restricting citizens’ access to internet platforms, which in January 2020 eliminated an 18% excise duty on mobile internet to facilitate increased access and usage of data by citizens. On the other hand, in countries such as Malawi, where telecommunications operators have over recent months made strides in lowering the cost of data services, Kalemera said the government maintains various ICT-related taxes that continue to affect affordability. 

Nwana said research shows that for every 10% increase in mobile broadband penetration, there is an increase of between 0.82 to 1.4% in Gross Domestic Product (GDP) of developing countries in Africa. He added: “Why do we want to forego this growth by increasing taxes which drops the number of people using broadband data services, which clearly adds significant value and GDP growth to our economy?”

The digital tax debate has also featured discussions around how African governments can derive revenue from big multinational companies such as Facebook which are domiciled abroad but have a significant number of users on the continent. 

Jacob Puhl, Manager of Tax Policy at Facebook, noted that while the social media platform generates about 98% of its revenue from advertising, only about 8-9% of that revenue comes from emerging economies in Africa and Asia. “People keep asking, ‘you have users here, why don’t you pay taxes?’ Because users of our platform are all over the world, there is a lot of misunderstanding about where our revenues come from as well as our advertisers. Advertisers pay more to reach markets where e-commerce is robust,” said Puhl.

Audience Q&A

Participant: It is true that Facebook is an advertising company based in the USA and that most users are not Facebook customers. However, take an advertiser like Coca-Cola. Their product is consumed in most countries in the world and so they advertise with Facebook because of those users who pay nothing to Facebook.

Response: In the 80+ countries where VAT is applied to ads purchased from non-resident companies, Coca-Cola would pay VAT to Facebook and we would remit it to the tax administration.

Indeed the impact of taxation on e-commerce platforms was highlighted as part of the workshop’s deliberations. For instance, according to Ron Kawamara, the Chief Executive Officer (CEO) Jumia-Uganda, the introduction of the OTT tax led to a decline in the number of vendors and customers on their platform despite the potential that e-commerce presents for the country and continent. 

“Before the tax, we had a reach of about 11 million users on Facebook. That dropped by 35% with the introduction of OTT. And with users turning to VPN, it becomes difficult to reach customers with one service or the other,” said Kawamara.

Jumia Uganda is a subsidiary of the pan-African e-commerce company Jumia Group, which is Africa’s largest online retailer. Launched in 2012, it currently has operations in 11 African countries as well as China, United Arab Emirates and Portugal. 

While e-commerce platforms can be catalysts for revenue generation for governments, the lack of visibility of some of the platforms has made it difficult for tax bodies to properly track and ensure tax compliance. This, according to Milly Nalukwago Isingoma, the Assistant Commissioner Research, Planning and Development at Uganda Revenue Authority (URA), has impacted how much revenue the government is able to generate from online platforms and businesses. 

“With the previous model of taxation, you had to have a physical address where you could reach the taxpayer. Now transactions are happening online with no visibility and our collections have remained low. This is what forced us to come up with taxes such as the OTT tax,” said Isingoma. 

Isingoma acknowledged that implementing the tax was difficult and less revenue than had been projected was collected. “We do acknowledge that we got it wrong with the OTT tax. That is why we decided to work with the telecom companies to come up with the 12% excise duty that cuts across. This way, we are also able to protect the revenue base of the telecom companies,” said Isingoma. 

Dr. Peter Mwencha, Director at Consumer Unity & Trust Society-Africa Centre, called for an update to tax laws on the continent in order to protect consumers and integrate the digital economy. Similarly, James Mutandwa Madya, the Director for Policy and Strategic Planning at the ICT ministry in Zimbabwe, noted that in order to address some of the challenges and limitations of digital taxation, tax models should be reviewed with the interests of governments and consumers taken into account. 

Creating this balance requires collaboration between regulators and tax bodies, according to  Anthony Marufu Chigaazira, the former Executive Secretary of the Communications Regulators Association of Southern Africa (CRASA). “Collaborative regulation should be at the forefront otherwise we end up with tax authorities who do not understand the sector proposing taxes that infringe on digital rights and impact the majority of the population,” said Chigaazira. 

Indeed, as noted by Pria Chetty, Director of the South Africa-based EndCode, it would be instructive to understand the trajectory of models informing specific digital tax approaches in different countries. According to her, “it would be too simplistic” to consider the motivation for digital taxes as merely a government “grab” for new taxation sources. 

Chetty added that instances where digital taxes have been withdrawn, including outside the continent, should offer learning to African regulators. “Regional and continental guidance on taxation that accounts for the unique costs of connectivity and unique value chains should also be a priority. National approaches should account for the state of the digital economy, existing tax structures, fundamental rights and competition dynamics,” said Chetty.

Resources:

08Jul

New Cyber Law Impedes Civil Liberties in Increasingly Repressive Zambia

Author CIPESA Posted on

By CIPESA Writer |

Zambia is increasingly repressing the exercise of civic rights, a trend that is growing as the country heads to general elections in August 2021. Human rights defenders are equally worried that state agencies could apply the recently enacted Cyber Security and Cyber Crimes Act 2021 to further undermine the digital civic space.

President Edgar Lungu, who has been in power since 2015, is standing for re-election in the August 12 elections. In the last five years of his reign, freedom of expression and peaceful assembly have come under increasing attack, with opposition leaders and activists jailed, and independent media outlets shut down, according to an Amnesty International Report.

The government denies these accusations, claiming the country has a vibrant civil society, a thriving independent media, and an impartial judiciary that protects civil liberties. However, independent analysts dismiss the government’s claims, pointing out that there has been “a creation of a fear society through the demonising of civil society and political opposition, the punishing of dissent, and weaponising the law and applying it selectively against anyone critical of the state.”

The repression in the southern African country has been witnessed both offline and online. Freedom House ranked the country’s state of internet freedom in 2020 as “partly free”, citing network restrictions, arrest of pro-government commentators and online users. And with the recent enactment of the cyber crimes law, worries are growing that the government could employ it as yet another weapon to silence dissenters and critics. Crucially, the new law falls short on protecting individual rights to privacy, anonymity, and freedom of expression online.

Notably, the law was passed amidst criticism that it was primarily aimed at policing cyber space and gagging freedom of expression and speech of government critics and opponents ahead of the August 12, 2021 general election. The government passed the law after rejecting concerns raised by civil society about its regressive provisions.

According to the Bloggers of Zambia, during 2020 seven people were arrested under the Criminal Procedure Code for purportedly defaming the president through posts on social media. Meanwhile, a 2020 report by Citizen Lab, a global digital rights watchdog, identified Zambia as a possible customer of cyber espionage software. This was the second time that Zambia, alongside other African governments, was featured in the report that unmasks clients of surveillance software. The country has also embarked on a Safe City Project that is mounting 24-hour surveillance cameras in public places and on the main road networks, despite its lack of an operational data protection law and regulations to govern the use of such video surveillance.

According to CIPESA’s analysis of the law, while cyber security is critical in the highly evolving technological era, it is important that a rights-based approach is employed in the development of policies and laws to ensure that the adopted laws and policies do not wantonly limit individual rights and freedoms. The Cyber Security and Cyber Crimes Act, 2021 in its current state offers some solutions to emerging challenges in the digital space but has wide negative impacts on the protection, promotion and enjoyment of digital rights and freedoms.

Under international human rights law, the rights to privacy, freedom of expression and information may only be restricted if prescribed by law, in pursuit of a legitimate aim, and if the restrictions are necessary and proportionate in pursuance of a legitimate aim. Many provisions in the Zambian law are vague and overly broad, and in contravention of the principle of legality. The law extends the powers of state authorities to restrict and punish online expression, and gives law enforcement agents leverage to conduct unsupervised surveillance without judicial oversight.

Indeed, the CIPESA analysis shows that Zambia’ cyber law falls short of the established regional and international human rights standards on the right to privacy as laid down in the African Union Convention on Cyber Security and Personal Data Protection, Universal Declaration of Human Rights (UDHR), the International Covenant on Civil and Political Rights (ICCPR), and the African Commission on Human and Peoples’ Rights (ACHPR) Declaration on Principles of Freedom of Expression and Access to Information. 

Accordingly, the Zambian parliament should consider repealing or amending the regressive provisions to ensure the protection of digital rights and freedoms. Short of this, the new law could only serve the purpose of handing enemies of democracy yet another weapon for silencing the legitimate expression of critics, political opponents, and ordinary citizens.

See here CIPESA’s full review of the ramifications of Zambia’s Cyber Security and Cyber Crimes Act 2021.

01Jul

Uganda Abandons Social Media Tax But Slaps New Levy on Internet Data

Author CIPESA Posted on

By Daniel Mwesigwa |

Uganda has ditched the Over-The-Top (OTT) tax that it introduced three years ago on the use of social media services after the tax failed to raise revenues and constrained internet usage. But appearing to not have learnt any lessons, the country has instead introduced a 12% tax on internet data.

Introduced on July 1, 2018, the infamous OTT tax, widely known as ‘social media tax’, required Ugandans to pay a daily levy of Uganda Shillings (UGX) 200 (USD 0.05) in order to access over 50 platforms including Facebook, Twitter, and WhatsApp. President Yoweri Museveni directed the introduction of the social media tax as a ‘sin tax’ to punish social media users in Uganda for the consequences of their “opinions, prejudices [and] insults” and as a means to raise government revenues. 

From inception, sections of civil society and the public saw the tax as an attempt to stifle free speech and access to information – and they warned that the tax would have disastrous effects on the country’s fledgling digital economy and digital civic space. These fears were not unfounded, as Uganda is a notable digital rights predator that has ordered social media blockages and internet shutdowns, besides harassing some social media users that are critical of the government.

Predictions that the social media tax would harm internet use and fail to generate the envisaged revenues indeed came true. At the time the government filed proposals to introduce the OTT tax, the Ministry of Finance projected that up to UGX 486 billion (USD 131 million) could be collected annually by 2022. However, by the end of July 2018, the projections had been revised downwards to UGX 284 billion (USD 78 million) annually. In July 2019, one year after the introduction of the tax, the revenue body reported that it had experienced an annual shortfall of 83%, having collected only UGX 49.5 billion (USD 13.5 million). In the second year, the social media tax fetched a paltry USD 16.3 million. 

Now, beginning July 1, 2021, the government has replaced the OTT tax with a direct 12% levy on the net price of internet data, after which a value added tax (VAT) of 18% will apply. 

According to a social media notice by Roke Telkom, an internet service provider, the charges for a basic 60GB monthly bundle will increase by an extra USD 1.5 per month with the new levy compared to what the same bundle cost when the OTT tax was being levied. In other words, this will cost an additional USD 18 per year compared to what the same bundle cost when the OTT tax was being levied.

Within the first year of the social media tax, Uganda lost five million internet subscriptions due to the negative effects of the tax. Although the tax was envisioned as small and manageable, it did not meet the fairness and proportionality requirements: for a country whose average phone subscriber spends just UGX 10,500 (about USD 2.8) per month on all their voice calls, data, SMS, and access taxes, according to Uganda Communications Commission (UCC) figures, a monthly social media tax of USD 1.5 alone consumes up to 54% of their telecommunication services spend. 

Moreover, in 2018, the Alliance for Affordable Internet (A4AI) showed that the social media tax was likely going to push basic connectivity out of reach for many including the underemployed and unemployed youth who make up over 78% of the population. Additionally, A4AI explained that this tax would increase the lowest income group’s access to the internet by 10%, resulting in just 1GB of data costing them nearly 40% of their average monthly income. 

In the 2020 Affordability Report, Uganda’s data costs are higher than the African average, with 1 GB of data costing up to 8.07% of an average Ugandan’s monthly income compared to Sub-Saharan Africa’s average of 3.1%. According to a 2018 nation-wide survey by the National Information Technology Authority of Uganda (NITA-U), 76.6% of respondents named high cost as the main reason why their use of the internet was limited.

Based on problematic assumptions and projections?

The tax was clearly based on wrong assumptions, and the signs were ominous from early on. In January 2019, the then Minister of ICT, Frank Tumwebaze, reportedly said his ministry could have been misguided by the finance ministry in introducing the social media tax and he promised an impact assessment to gauge potential policy re-alignments. A year later in January 2020, the then revenue body’s Commissioner General, Doris Akol, decried social media tax avoidance through the use of Virtual Private Networks (VPN). She called for the tax to be repealed and replaced with a direct levy on internet data. 

Indeed, since the social media shutdown during Uganda’s 2016 general elections, the use of VPN apps has been growing. These have helped users to avoid paying the OTT tax and to sidestep further internet shutdowns, such as the recent disruption during the 2021 election and the suspension of Facebook access in Uganda, which is in the fifth month now.

According to UCC, as of December 2020, there are 21.4 million active internet subscriptions – translating into a little more than one active connection for every two Ugandans – but the number of subscribers  who paid the OTT tax at least once during that month was 13.7 million. For most months in the lifetime of the tax, the number of OTT taxpayers remained under 10 million. At the time Uganda introduced the tax, the internet penetration rate stood at 47.4% (18.5 million internet subscriptions), meaning in three years, the country has added under three million subscriptions and the penetration rate has risen marginally. 

The new 12% levy comes when Uganda is in the middle of a second wave of Covid-19, which saw the government recently instituting a 42-day lockdown that prohibits all public gatherings, inter-district travel, and public transport. This has rendered digital technologies indispensable to working, learning, public participation, and livelihoods, yet Uganda’s new tax will adversely affect internet access and citizens’ access to information – perhaps more than the now repealed social media tax. 

Having recently secured a USD 200 million loan from the World Bank to support “access [to] high-quality and low-cost internet, public services online, a digital economy driving growth, innovation and job creation,” Uganda’s new tax seems inconsistent to the larger national visions of digital transformation, including the National Broadband Policy (2018-2023) and the Digital Vision 2040.

But Uganda is not alone on this worrying path. Following the Covid-19 disruptions to domestic economies marked by weakening tax bases, various countries in the region have turned to, or are considering, some form of digital tax as one of the new revenue streams. For example, Zambia and Nigeria have considered plans of imposing direct taxes on OTT services but have withdrawn following backlash. Botswana has indicated it is exploring a digital tax due to a decrease in tax revenue and in 2020, Mauritius introduced a 15% VAT on digital services provided by non-resident companies.

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