CIPESA Submits Comments on Uganda’s Proposed New Digital Tax 

By Edrine Wanyama |

On April 28, 2023, the Collaboration on International ICT Policy for East and Southern Africa (CIPESA)  submitted comments on the Income Tax (Amendment) Bill, 2023 to the Committee on Finance, Planning and Economic Development of the Uganda Parliament. The comments argue that the proposed law would  undermine access to and use of digital tools and services. 

The bill, among others, proposes to impose a tax of five percent on foreign-based entities that derive income from providing digital services to customers in Uganda. The proposals are contained in clause 16 which seeks to introduce a new section, 86A.

Clause 86A provides:

  1. A tax is imposed on every non-resident person deriving income from providing digital services in Uganda to a customer in Uganda at the rate prescribed in Part IV of the Third Schedule to this Act.
  2. For the purposes of subsection (1), income is derived from providing a digital service in Uganda to a customer in Uganda, if the digital service is delivered over the internet, electronic network or an online platform.
  3. For the purposes of this section “digital service” includes—
  1. online advertising services;
  2. data services;
  3. services delivered through an online marketplace or intermediation platform, including an accommodation online marketplace, a vehicle hire online marketplace and any other transport online marketplace;
  4. digital content services, including accessing and downloading of digital content;
  5. online gaming services;
  6. cloud computing services;
  7. data warehousing;
  8. services, other than those services in this subsection, delivered through a social media platform or an internet search engine; and
  9. any other digital services as the Minister may prescribe by statutory instrument made under this Act.”

While the clause targets non-residents, if enacted it would add to the digital taxes borne by the already tax-burdened consumers of digital services in Uganda. Since July 1, 2022, web hosting, software and streaming services in the country pay a mandatory value added tax of 18% chargeable on consumers of services offered by  platforms such as Amazon, Meta (Facebook), Twitter and Zoom. 

The tax would potentially hinder inclusive access and use of digital technologies and negatively affect Uganda’s digital economy. According to the United Nations Capital Development Fund (UNCDF), Uganda’s digital economy score is low, particularly in areas such as digital inclusiveness. According to the UNCDF Score Card of 2021 the digital divide or groups most excluded from the digital economy in Uganda are the elderly (80%), rural communities (64%), persons with disabilities (74%), the youth (33%), refugees (80%) and migrants (75%). The inclusion gap such as for persons with disabilities is attributed to the high cost of technologies. 

Innovation is a prerequisite for the provision of digital services including advertising, data services, marketing, cloud computing services, and data warehousing. Most of these tools and services are developed outside Uganda, hence imposing high taxes on non-residents that provide them could   limit access to these critical tools and services. That could push Ugandans further into the margins of the global digital economy.

The enjoyment of digital rights and freedoms, including freedom of expression, access to information, and association, could also be limited by the imposition of high digital taxes. 

Accordingly, the submission by CIPESA recommends that the Committee on Finance, Planning and Economic Development:

  1. Drops the entire proposed clause 16 of the Income Tax (Amendment) Bill, 2023;
  2. Conducts wide consultations with the affected stakeholders including the tech community, innovators, the business community and civil society on the potential effects of the proposed amendment.
  3. Conducts a tax impact assessment to weigh the potential effects of the proposed tax on access and use of digital tools and services. The impact assessment should specifically spell out the anticipated positive impacts and weigh them against the anticipated negative effects.
  4. Takes into consideration and supports all the progressive policies that seek to increase and enhance accessibility and usage of digital tools and services such as tax incentives which usually lead to lowering of the costs to be borne by consumers in purchase and use of digital tools and services.

See the full submission here.

Apply To The Latest Round of the Africa Digital Rights Fund (ADRF)

Announcement |

The Collaboration on International ICT Policy for East and Southern Africa (CIPESA) is calling for proposals to support digital rights work across Africa. The current call is particularly interested in proposals for work related to:

  • Data governance including aspects of data localisation, cross-border data flows, biometric databases and digital ID
  • Digital resilience for human rights defenders, other activists and journalists
  • Censorship and network disruptions
  • Digital economy
  • Digital inclusion including aspects of accessibility for persons with disabilities
  • Disinformation
  • Online violence against women
  • Platform accountability

Grant amounts available range between USD 1,000 and USD 10,000, depending on the need and scope of the proposed intervention. Cost-sharing is strongly encouraged and the grant period should not exceed six months. Applications will be accepted until May 5, 2023.

This call for proposals is the seventh under CIPESA’s Africa Digital Rights Fund (ADRF) initiative which provides rapid response and flexible grants to organisations and networks to implement activities that promote digital rights, including advocacy, litigation, research, policy analysis, skills development and movement building. Since its launch in April 2019, the ADRF has to-date supported 52 initiatives with a total sum of USD 649,000 across 39 African countries and contributed to building capacity and traction for digital rights advocacy on the continent. 

Highlights of ADRF-supported initiatives

Application Guidelines

Geographical Coverage

The ADRF is open to organisations/networks based or operational in Africa and with interventions covering any country on the continent.

Size of Grants

Grant size shall range from USD 1,000 to USD 10,000. Cost sharing is strongly encouraged.

Eligible Activities

The activities that are eligible for funding are those that protect and advance digital rights. These may include but are not limited to research, advocacy, engagement in policy processes, litigation, digital literacy and digital security skills building.

Duration

The grant funding shall be for a period not exceeding six months.

Eligibility Requirements

  • The Fund is open to organisations and coalitions working to advance digital rights in Africa. This includes but is not limited to human rights defenders, media, activists, think tanks, legal aid groups, and tech hubs. Entities working on women’s rights, or with youth, sexual minorities, refugees, and persons with disabilities are strongly encouraged to apply.
  • The initiatives to be funded will preferably have formal registration in an African country, but in some circumstances organisations and coalitions that do not have formal registration may be considered. Such organisations need to show evidence that they are operational in a particular African country or countries.
  • The activities to be funded must be in/on an African country or countries.

Ineligible Activities

  • The Fund shall not fund any activity that does not directly advance digital rights.
  • The Fund will not support travel to attend conferences or workshops, except in exceptional circumstances where such travel is directly linked to an activity that is eligible.
  • Costs that have already been incurred are ineligible.
  • The Fund shall not provide scholarships.
  • The Fund shall not support equipment or asset acquisition.

Administration

The Fund is administered by CIPESA. An internal and external panel of experts will make decisions on beneficiaries based on the following criteria:

  • If the proposed intervention fits within the Fund’s digital rights priorities.
  • The relevance to the given context/country.
  • Commitment and experience of the applicant in advancing digital rights.
  • Potential impact of the intervention on digital rights policies or practices.

The deadline for submissions is Friday May 5, 2023. The application form can be accessed here.

Digital Democracy in Africa: What Has the Law Got to Do With It?

By Edrine Wanyama |

With digital freedoms continuing to take a hit amidst a wider democratic regression across Africa, the role of laws in curing what ails democracy in the region warrants scrutiny. In a number of countries, the laws that regulate how citizens use digital platforms and exercise their digital rights are retrogressive and fail to offer sufficient protection to citizens. Many of them are broadly worded, give extensive powers to state agencies to interpret the laws and to interfere with citizens’ rights.

In turn, the legal and regulatory framework has become central in shaping digital rights and digital democracy in Africa. Governments have enacted regressive and draconian laws that variously empower state agencies to limit the digital civic space. As a result, rights such as freedom of expression, access to information, and data privacy continue to come under threat due to the high-handed and often excessive control measures. 

In many countries laws have been weaponised to silence critics, notably those that use digital and social media to organise or express opinions critical of governments and state officials. Various laws are being used to arrest, persecute, detain and prosecute individuals over online communication, as have been witnessed in the Democratic Republic of Congo (DRC), Mozambique, Kenya, Rwanda, South Sudan, Tanzania, Uganda, Zambia, Zimbabwe and several other countries. These measures curtail press freedom and other digital rights that are at the root of democratic participation.

Laws that regulate state surveillance are among those that have a profound chilling effect on digital rights and citizen participation. Anonymous communication in the digital domain is crucial for citizens, journalists and political actors to operate without fear of reprisals, particularly in authoritarian countries. Yet the conduct of surveillance in the region is enabled by laws that give broad powers to state agencies to conduct surveillance amidst limited oversight and transparency, and strenuous demands on intermediaries to facilitate communications monitoring and interception.

Equally concerning is that various governments have weaponised disinformation laws to silence critical voices, rather than utilising them to counter the ills of disinformation. Similar to the purposes that state surveillance often serves, laws on countering disinformation have in many cases been used to target political critics.

In turn, those laws (which tend to be vague and ambiguous and fail to distinguish between disinformation or falsified information, making their enforcement open to the subjective interpretation of law enforcement agencies) are being used to stifle legitimate expression and to hamper access to critical and pluralistic information. This has been common in countries like Burkina Faso, Ethiopia, Kenya, Nigeria, Tanzania and Uganda where laws criminalising disinformation and false news, such as  those on computer misuse, are often deployed to silence government critics.

Governments have also relied on different laws to order internet disruptions, which create information blackouts, deny citizens their right to access information, associate and express themselves. Mostly ordered during elections and public protests, the network disruptions also undermine electoral credibility and hinder the ability of citizens to record and disseminate incidents of rights violations by security agencies and other actors.

Many observers around the continent, as well as the United Nations, have repeatedly urged states to refrain from ordering shutdowns, which they say are often not necessary or proportionate to address the threats that prompt governments to order them. However, such network disruptions continue unabated in parts of Africa, with governments and communications regulators citing various laws to justify them. According to the KeepItOn coalition, at least four of the region’s nine shutdowns during 2022 took place alongside reported human rights abuses, both in the context of violent crackdowns on protests and active conflict.

There are other ways still in which the law is undermining the protection of freedom of expression and access to information and data privacy. Many African countries have enacted access to information laws to facilitate public access to information in possession of the state. They include Kenya (enacted in 2016), Rwanda (2013), South Sudan (2013), Tanzania (2016), Uganda (2005), Malawi (2017), Mozambique (2014), and Zimbabwe (2020). On the other hand, countries like the DRC, Burundi, and Zambia do not have specific laws on access to information.

However, many of the existing laws have wide exemptions and limitations to the kinds of information that citizens can access. These limitations are primarily based on national security, official secrecy laws, individual privacy and confidentiality justifications. Proactive disclosure of information is rare in most countries, and information of vital importance to citizens is in short supply online. This undermines accountability and transparency of governments, which are key ingredients for citizen participation in democracy. 

At another level, proliferation of technology has led to a need to protect individual privacy. Previously, countries collected personal data in absence of enabling legislation, for such purposes as immigration, issuance of driving permits and SIM card registration. This has, in turn, necessitated the adoption of laws to protect privacy: Uganda (2019), Kenya (2019), Rwanda (2021), Tanzania (2022), South Africa (2013), Zambia (2021) and Zimbabwe (2021). Still, countries like South Sudan, DRC, Malawi, and Mozambique are yet to enact specific laws. 

Despite the adoption of laws, they generally fall short of the ideal practices. Many countries do not have independent data protection authorities and there is inadequate oversight and enforcement of personal data protection standards and mechanisms. Moreover, only 13 of Africa’s 55 countries have ratified the African Convention on Cyber Security and Personal Data protection. These are Algeria, Cape Verde, Congo Brazzaville, Ghana, Guinea, Mozambique, Mauritius, Namibia, Niger, Rwanda Senegal, Togo and Zambia. Reluctance to endorse this lead guiding instrument on data protection, privacy and cyber security is telling of countries’ commitment to respecting privacy.

Meanwhile, numerous data protection laws facilitate governments’ access to personal data without adequate safeguards, thereby enabling undue surveillance and interception of communications and unlawful use of private information. They fail to adequately regulate the mass collection of individuals’ personal data, including biometrics, for issuance of national identity cards, immigration documents, voters’ cards and driving permits. Furthermore, the laws often restrict the transfer of personal data outside national borders but do not put sufficient checks on governments’ access to this data.

Indeed, the place of the legal and regulatory framework in promoting and protecting fundamental freedoms was in focus at a regional convening on March 13-14, 2023, by the International Senior Lawyers Project (ISLP) in partnership with the Media Institute of Southern Africa (MISA) and Southern African Institute for Policy and Research (SAIPAR) in Harare, Zimbabwe. 

The workshop identified advocacy, capacity building, analysis of laws and proposed legislation, engagements with parliaments on law reform, and litigation at national and regional courts, as key to promoting the digital civic space. Yet, as CIPESA noted at the meeting, political interference, long periods taken to determine cases, and non-compliance of states with decisions of regional courts have hampered the effectiveness of litigation.

The convening made recommendations to governments, civil society, and the private sector:

  1. Governments
  • Sign and ratify key international human rights instruments on data protection and privacy especially the African Union Convention on Cyber Security and Personal Data Protection.
  • Ensure a favourable environment for the exercise and enjoyment of digital rights and freedoms by among others enacting progressive laws and repealing draconian legislation.
  • Promote accountability and transparency by proactively disclosing information in a timely manner and expeditiously responding to information requests from citizens.
  1. Civil Society, the Private Sector and Tech Communities
  • Jointly push for the amendment of regressive laws that undermine digital rights, and contribute to law-making processes by analysing bills and making proposals for reform, repeal or amendment. 
  • Advocate for compliance with the United Nations Guiding Principles on Business and Human Rights to ensure that violations of human rights are minimised in the course of doing business.
  • Engage in strategic and collaborative litigation to challenge all measures by governments which curtail digital rights and undermine digital democracy. 
  • Build capacity of stakeholders including the media and the general public to protect and promote digital rights and to demand accountability and transparency from governments and their agencies.
  • Use human rights monitoring mechanisms such as the Universal Periodic Review (UPR) to hold their states to account.
  • Advocate for states to ratify key human rights instruments such as the AU Convention on Cyber Security and Personal Data Protection.

Court Admits Expert Views from CIPESA, Access Now and Article 19 on Uganda’s Digital ID 

By CIPESA Writer |

On March 24, 2023, the High Court of Uganda at Kampala ruled to allow experts from Access Now, ARTICLE 19, and the Collaboration on International ICT Policy for East and Southern Africa (CIPESA) to offer their opinions on the human rights red flags around the country’s digital identification (ID) system. 

The ruling followed an application by the three organisations for admission as “Friends of Court” in a case which challenges the use of the National Identification Register as the sole data source and primary means of identification prior to accessing various social services. Uganda’s national digital ID, also known as Ndaga Muntu, is a mandatory scheme for accessing various socio-economic services.

The court admitted the amicus brief submission by the trio despite objections from the Attorney General and the National Identification Registration Authority (NIRA) on grounds that the application was facilitated by bias and partiality of the applicants. The respondents further argued that the applications introduced new, inadmissible evidence – an assertion the court did not agree with. The court, in fact, noted the significance of the arguments raised  by Access Now, ARTICLE 19 and CIPESA, particularly on data protection, digital inclusion, surveillance, and the sufficiency of protection measures and their impact on the right to privacy.

The admission means that the court will consider the opinions of the three organisations in determining the case challenging Uganda’s digital ID system. In his ruling, Justice  Boniface Wamala noted that the matters the three organisations raised did not constitute evidence. Rather, they “constitute legal concepts that are new, unfamiliar, unusual or unique. Such aspects constitute the quality of novelty.”

The organisations made the application as neutral parties and experts to assist the court to be better abreast with novel areas that potentially contribute to the development of the law. 

The joint brief seeks to help court fully grasp the potential impact of the national digital ID program on online and offline rights including the right to privacy, the right to freedom of expression, as well as intersecting economic, social, and cultural rights by providing expert evidence at national, sub regional, regional, and international levels. It also explains how the digital identity system might contribute to excluding citizens from basic access to services, thereby leaving them in a vulnerable state.  

The case challenging the ID system was filed by the Initiative for Social and Economic Rights,  Unwanted Witness, and Health Equity and Policy Initiative, against the Ugandan Attorney General and the NIRA. The NIRA is the body charged with creating and managing the National Identification Register by registering births, deaths, citizens and non-citizens. 

In its affidavit in support of the amicus application, CIPESA argued that as an expert in  advancing internet freedom and governance, civic participation, and data governance, it saw the need to intervene as a friend of court, in public interest and the interest of justice, to promote and protect human rights.

According to CIPESA’s Legal Officer, Edrine Wanyama, the ruling to hear the opinions of the expert organisations could help in shaping new and emerging areas of the law in Uganda on the need to respect privacy and other rights in the deployment of digital technologies in public digitalisation programmes, including initiatives like the Digital ID.

“This is a demonstration of the commitment of the courts to remain open to new and emerging knowledge and jurisprudence and to receive expert opinions on how to protect citizens from potential harms associated with the use of technology,” said Wanyama. 

CIPESA anticipates that the court will draw considerable knowledge from the amicus submissions and reach a decision that ensures that the roll-out of the digital ID system does not serve as a tool for exclusion but as an inclusion tool for all persons in accessing social and economic services.

Access Now, ARTICLE 19, and CIPESA aim to continue offering the court expert views that could help to ensure that the digital ID system is implemented in a manner that respects minimum human rights standards and promotes and protects rights and freedoms.

Building Cyber Smart Women Entrepreneurs in Nigeria

By CIPESA Staff Writer |

According to the Global Entrepreneurship Monitor, Nigeria is among the countries with the highest number of women entrepreneurs, most of whom conduct their business online. However, with the increasing prevalence of cyber attacks and fraud, the success of women-owned Small and Medium Enterprises (SMEs) in the country is under threat. In Nigeria, Africa’s largest economy, Sophos reports that 71% of businesses were hit with ransomware attacks in 2021.  

In 2021, cybercrime caused an estimated USD 4 billion loss for African economies, equivalent to 3.5% of the continent’s USD 115 billion digital economy. Despite significant threats such as online scams, digital extortion, email compromise, ransomware and botnets, Interpol figures indicate that over 90% of businesses on the African continent operate without the necessary cyber security protocols in place. 

In a bid to counter such threats, Tech Hive Advisory in partnership with Ikigai Innovation Initiative implemented the Cyber Smart Woman project to build a sustainable digital ecosystem for women entrepreneurs in Nigeria. The three-phase project featured 12 focus group discussions on data governance, cybersecurity challenges, and digital security needs of the women-owned SMEs, followed by four knowledge and skills workshops, and the development of a toolkit on data protection and cyber security practices for sustainability and competitiveness.

Tech Hive Advisory and Ikigai Innovation Initiative were one of ten initiatives awarded grants in the sixth round of the Africa Digital Rights Fund (ADRF). The supported initiatives focused on promoting effective data governance in Kenya, Nigeria and Senegal; countering gendered and election-related misinformation and disinformation in Kenya, South Sudan and Uganda; building digital resilience within the media fraternity in Ghana, Nigeria and Uganda; promoting digital inclusion in Uganda and Kenya; and building grassroots-based movements for internet freedom in South Africa.

The focus group discussions featured participants from various online business sectors, many of whom revealed that they lacked adequate digital protection for their businesses. Up to a quarter of the participants had been direct victims of device theft and cyber attacks such as scams and hacking. As a result, their businesses had suffered monetary loss, reputational damage, and, in extreme instances, loss of online assets such as social media accounts and client databases. 

The discussions further revealed that despite the SMEs collecting various personal data, the majority did not include online security or data protection measures within their business strategies. Meanwhile, many clients did not invoke their rights as data subjects, which made their data more susceptible to abuse. Indeed, one participant admitted that she had  shared a client’s contact information without permission. 

Most of the focus group participants believed that with the appropriate knowledge and skills, business owners, just like data subjects, would be able to minimise vulnerability to cyber attacks  and data breaches. Accordingly, four capacity building workshops were convened in four regions – Abuja, Ibadan, Kaduna and Lagos –  benefiting 167 SME owners. Topics covered included data protection rights and obligations; compliance with data protection regulations; and cybersecurity best practices.  

To complement the training workshops, a toolkit for data protection and cybersecurity was developed and disseminated. The toolkit outlines Nigeria’s data protection frameworks as well as the obligations and compliance requirements for business owners. It also provides tips and resources for data subject access procedures, privacy policies, records of processing activities and retention periods. The second section of the toolkit focuses on cybersecurity, also outlining the prevailing legal and regulatory frameworks, common vulnerabilities, best practice guidelines and resources. 

Ayodeji Sarumi, the Co-Founder of Tech Hive Advisory, says the project has equipped female-owned businesses in Nigeria with better approaches to handling data protection and cybersecurity issues,  which could be essential for their survival in a highly digitised world where cyber fraud is rampant.