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  HomeCollaboration on International ICT Policy for East and Southern Africa (CIPESA)  /  Uganda
01Jul

Uganda Blocks Access to Social Media, VPNs and Dating Sites as New Tax Takes Effect

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By Juliet Nanfuka |
As of midnight on July 1, 2018, telecom companies in Uganda blocked access to social media platforms for all users and required them to pay a newly introduced Over-The-Top” (OTT) tax before regaining access. The tax resulted from a March 2018 presidential directive for social media to be taxed to raise resources “to cope with the consequences” of social media users’ “opinions, prejudices [and] insults”.

“In a context in which social media has served as many users’ initial entry point to the internet, this tax could negatively impact the affordability and broader use of the internet, particularly by low-income Ugandans, as well as stifle freedom of expression, association and assembly online.”

Joint oral statement to UN Human Rights Commission on Social Media Taxes by APC, CIPESA,  Derechos Digitales and WOUGNET

The directive proposed that up to UGX 400 billion (USD 108 million) per annum could be collected through the taxes. Projections from the June 14 national budget speech for the fiscal year 2018/19 indicated that up to UGX 486 billion (USD 131 million) could be collected annually by 2022. Earlier in May, Uganda’s parliament passed the Excise Duty Act (Amendment) Bill 2018, which introduced a mandatory fee of UGX 200 (USD 0.05) per day of use for services that include messaging and voice calls via Whatsapp, Facebook, Skype and Viber.

The tax will likely push basic connectivity further out of reach for millions. At the USD 0.05 per day, a Ugandan user would need to fork out USD 1.5 per in monthly fees to access the OTT services. That would be hugely prohibitive since the average revenue per user (ARPU) of telecom services in Uganda stands at just USD 2.5 per month.
According to the Alliance for Affordable Internet (A4AI), at the end of 2016, a 1GB mobile broadband plan in Uganda cost more than 15% of average monthly income. The A4AI further states that with the excise duty in place, this cost to connect for Uganda’s poorest will jump by 10%, resulting in just 1GB of data costing them nearly 40% of their average monthly income.
Section 2 of the Excise Duty Amendment Act provides that the tax will apply to “the transmission or receipt of voice or messages over the internet protocol network and includes access to virtual private networks but does not include educational or research sites prescribed by the Minister by notice in the Gazette.” The Uganda Revenue Authority (URA) has listed sites such as professional networking platform LinkedIn and dating sites such as Badoo and Tinder among those that would be accessed only upon payment. The government has not stated what constitutes educational or research sites.
As of September 2017, Uganda had an internet penetration rate of 48%, in a country of 41 million people. Research shows that at least one in nine internet users in the country is signed up for a social networking site, with Facebook and WhatsApp the most popular. The introduction of the tax has accordingly elicited strong opposition from users including the limitation of payment only through mobile money, Electronic Virtual Cash (EVC) or any electronic wallet.
The Excise Duty Amendment Act also introduced a 1% tax on the value of every mobile money transaction which users will also have to pay in addition to the OTT tax. The Act also raised the tax on airtime for cellular, landline and public payphones from 5% to 12% and increased the tax on mobile money transfers from 10% to 15%.


Some users are expressing frustration with having to pay twice – first the OTT tax, then the 1% tax on every mobile money transaction – in order to access social media and other blocked sites.
Many social media users have turned to using Virtual Private Networks (VPNs) to remain online and avoid the taxes. This is a similar stance to that taken during 2016, when Uganda had social media shutdowns on two occasions, leading to a surge in VPN use. However, access to some VPN sites – particularly free ones – has also been blocked and knowledge about VPN access and use is largely limited to tech savvy users. Further, there remains concern on the extent to which VPNs will be an affordable option due to their heavy data requirements.


A poll conducted by Daily Monitor newspaper on its Twitter handle showed that 19% of the 581 tweeps who participated would spend less time on social media, 11% would stop using social media, while 70% would resort to using VPN.
Further, imposition of the tax has consequences on net neutrality which requires that the Internet be maintained as an open platform on which network providers treat all content, applications and services equally, without discrimination. The tax effectively limits access to social media sites which are a primary entry point for many new users to the internet in developing countries including Uganda. Indeed, it is in social media platforms that many have found relatable local content including avenues for knowledge exchange, civic participation and economic opportunity.


Telecommunications companies had previously sought  to tap into the popularity of OTTs by offering competitive social medias data packages – such as such as MTNs SWIFT (Snapchat, WhatsApp, Instagram, Facebook and Twitter) and WTF (WhatsApp, Twitter, Facebook) – resulting in what was popularly referred to as “data price wars” that led to a drop in the price of access.
Meanwhile, the state also found value in the use of social media as an avenue for engaging with citizens and required all Ministries, Departments and Agencies (MDAs) to pursue a social media strategy to promote state-civic interaction which aimed at “improving effectiveness of communication, sharing of information and open engagement and discussions with the Public.” Results of the Uganda national IT survey 2017/18 indicated that 92% of MDAs have a social media presence with most using Facebook, Twitter and WhatsApp as their primary platforms for information dissemination and engagement with citizens.

Source: National IT Survey 2017/18

The Uganda government did not conduct any public consultations before introducing the OTT tax, which is testament to the absence of a multi-stakeholder model of internet governance that would enable the perspectives of diverse stakeholders to support more informed policy decisions. This tax comes on the heels of a directive last March by the communications regulator for registration of online content providers. Uganda is potentially setting a worrying trend for the region, as neighbours Tanzania and Congo have similarly issued stringent online content regulations that threaten citizens’ rights to privacy and freedom of expression and promote self-censorship.
 

06Jun

Uncertainty Over How Uganda’s New Social Media Tax Will be Collected

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By Juliet Nanfuka |
On May 30, 2018, Uganda’s parliament passed the Excise Duty (Amendment) Bill 2018, which will see users of Over-The-Top (OTT) services that include messaging and voice calls via Whatsapp, Facebook, Skype and Viber pay a mandatory fee of UGX 200 (USD 0.05) per day of use. In another move that could hit affordability, stifle innovation, and undermine the role digital technologies play in socio-economic transformation, the amendment will also introduce a one percent fee on each mobile money transaction. However, it remains unclear how the tax on social media use would be collected.
The amendment bill was first introduced last April and was met with criticism over the new taxes, which many observers believe would make Information and Communication Technologies (ICT) inaccessible to majority of Ugandans. The taxes were proposed in response to a letter president Yoweri Museveni wrote to the finance ministry wherein he stated that the government needed resources “to cope with the consequences” of social media users’ “opinions, prejudices [and] insults”. Without mentioning mobile money, Museveni proposed a levy of UGX 100 (USD 0.025) per day per OTT user, but proposals by the finance ministry, since passed by parliament, doubled this figure.
Further, days after parliament passed the amendments bill, the finance minister reportedly stated that the tax rate on mobile money transactions should be 0.5% and not 1% and suggested that the bill could need revisiting.


As of September 2017, Uganda had an internet penetration rate of 48%. Meanwhile, there were 23 million mobile money subscribers in a country of 37.7 million people, and their more than 340 million transactions during the third quarter of 2017 alone totalled UGX 18.1 trillion (USD 4.7 billion).
Mobile money has been a primary avenue of financial inclusion particularly for the unbanked. According to the Bank of Uganda, in 2015, only 16% of the population had a bank point of service within one kilometre of a home, whereas 54% of the population had a mobile money point of service within one kilometre.
Meanwhile, social media has served as many users’ initial entry point to internet use in many developing countries such as Uganda. This is among the reasons why OTT packages have been popular with telecommunications companies as tools to attract more clients. Introducing taxes on the use of these platforms could therefore negatively impact local content development and civic participation tools that rely on these services.
The proposals passed by Uganda’s parliament also include raising tax on airtime on cellular, landline and public payphones from 5% to 12% and the increase on the tax on mobile money transfers from 10% to 15%. .
The passing of the bill attracted various reactions on Twitter:


In 2016, social media and mobile money services were shut down twice during the electioneering period.


As a result of the shutdown of social media platforms, Virtual Private Networks (VPNs) became popular as users sought alternative avenues to remain online. There were no alternatives for mobile money users but the impact of the shutdown was felt by mobile money service providers such as the Airtel Uganda mobile money platform which at the time was  used by around 650,000 unique users per day and processed around 30 billion Ugandan shillings (USD 8.8 million) according to FSD Uganda.
At a private sector dialogue hosted by the Collaboration on International ICT Policy in East and Southern Africa (CIPESA) a day after the passing of the bill, participants noted that the move to tax mobile money services could potentially force users to explore other alternatives for transactions, including reverting to cash or to new financial transaction models such as blockchain which is emerging as a  potential alternative avenue for financial transactions in Uganda.


According to a 2017/18 Uganda National Information Technology Survey, social media platforms including OTT services are some of the popular avenues through which civic engagement has been pursued by the state. It remains to be seen how access to government services will be incorporated in the new tax model.


With the taxation expected to come into effect as early as July 1, 2018, uncertainty remains over whether, if signed into law by the president, the tax would be executed given the limited public consultation and the absence of guidelines.

16Apr

Uganda’s Social Media Tax Threatens Internet Access, Affordability

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By Juliet Nanfuka |
Uganda’s president Yoweri Museveni has directed the finance ministry to introduce taxes on the use of social media platforms. According to him, the tax would curb gossip on networks such as WhatsApp, Skype, Viber and Twitter and potentially raise up to Uganda Shillings (UGX) 400 billion (USD 108 million) annually for the national treasury. The ministry has already proposed amendments to the Uganda Excise Duty Act, 2014 to introduce taxation of “over-the-top” (OTT) services, and raise taxes on other telecommunications services.
Section 4 of the Excise Duty (Amendment) Bill 2018, a copy of which was obtained by CIPESA, states: “A telecommunication service operator providing data used for accessing over the top services is liable to account and pay excise duty on the access to over the top services.” The amendment defines such services as the “transmission or receipt of voice or message over the internet protocol network and includes access to virtual network; but does not include educational or research sites which shall be gazetted by the Minister.”
According to the proposals, which could take effect on July 1, 2018, OTT services that commonly include messaging and voice calls via Whatsapp, Facebook, Skype and Viber will attract a tax duty of UGX 200 (USD 0.05) per user per day of access. In his letter, Museveni said the government needed resources “to cope with the consequences” of social media users’ “opinions, prejudices [and] insults”. He proposed a levy of UGX 100 (USD 0.025) per day per OTT user. Prime Minister Ruhakana Rugunda supported the suggestion as did the ICT minister, who stated that the taxes were meant to increase local content production and app innovation in Uganda.
If implemented, the proposed tax will be the latest in a series of government actions that threaten citizens’ access to the internet. Last month, the communications regulator issued a directive calling for registration of online content providers and also released tough restrictions on registration of SIM cards. At the USD 0.05 per day suggested by the finance ministry, a Ugandan user would need to fork out USD 1.5 per in monthly fees to access the OTT services. That would be hugely prohibitive since the average revenue per user (ARPU) of telecom services in Uganda stands at a lowly USD 2.5 per month.
According to the Uganda Communications Commission (UCC), in the 2016-2017 financial year, Uganda’s telecommunications sector contributed UGX 523 billion (USD 141.2 million) to national tax revenue, an increase of 14.3% from the previous year’s UGX 458 billion (USD 123.6 million).
As of September 2017, Uganda had an internet penetration rate of 48% while the mobile subscription stood at 65 lines per 100 persons. Research shows that at least one in nine internet users in the country is signed up for a social networking site, with Facebook and WhatsApp the most popular.
Indeed, social media and by extension OTT services, are key avenues for public discourse, service delivery and political engagement. As per the recently released results of the national IT survey 2017/18, 92% of MDAs have a social media presence with most using Facebook, Twitter and WhatsApp as their primary platforms for information dissemination and engagement with citizens. Meanwhile, telecommunications companies have tapped into the popularity of OTTs by offering competitive social media data packages, resulting in what was popularly referred to as “data price wars.”
The amendment bill also proposes a 12% tax for airtime on cellular, landline and public payphones. The latter two previously attracted a 5% tax. The tax on mobile money transfers has been increased from 10% to 15%, while a 1% tax has been introduced to the value of mobile money transactions of receiving and withdrawals.
The proposed taxes do little to support internet affordability in Uganda, which already scores poorly on the Affordability Drivers Index (ADI) that annually assesses communications infrastructure, access and affordability indicators. Currently, 1GB of mobile prepaid data in Uganda costs more than 15% of the average Ugandan’s monthly income. This is much higher than the recommended no more than 2% in order to enable all income groups to afford a basic broadband connection.
The proposed taxes have also raised considerable debate among members of civil society and the business sector, who are concerned that consumers will inevitably be economically affected, while the legal fraternity has called the move unconstitutional. In a country where two social media shutdowns were ordered in a space of three months during 2016, and where some social media users have been prosecuted or arrested over opinions expressed on Facebook and Twitter critical of public officials, these developments are particularly worrying. Already, the perceived high level of surveillance has forced many Ugandans including the media, into self-censorship, turning them away from discussing “sensitive” matters of community or national importance.
The increasing popularity of social media enabled OTT services, brings new regulatory challenges for governments, as many of these services have not required a licence or been required to pay any licensing fee according to the Electronic Frontier Foundation (EFF). However, the regulation of OTT platforms and services may in some cases adversely affect user rights.
On the financial inclusion front, the proposed taxes are also likely to affect mobile money subscriptions and the cost of doing business. In Uganda and across Africa, mobile money has become the primary means of financial transactions, offering new opportunities for productivity and efficiency gains to governments, businesses and individuals.
Feature photo by GotCredit
 

10Feb

CIPESA Submits Comments On The Uganda Data Protection and Privacy Bill, 2015

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Official Submission |
Article 27 of Uganda’s constitution provides for citizens’ right to privacy, however, there is no law to protect an individual’s data privacy despite the large amounts of citizen data collected by government departments and private entities on a regular basis. More concerning, is that this data is collected with no guarantee of its protection and privacy.
Some existing legislation, for instance the Computer Misuse Act, 2011 (section 18); Access to Information Act, 2005 (section 26); Uganda Communications Act, 2013 (section 79); Electronic Signatures Act, 2011 (section 81); and the Regulation of Interception of Communications Act, 2010 (section 2) prohibit unauthorised access and disclosure of information. However, the provisions in these laws are not elaborate and do not adequately protect personal data.
The publication of the draft Data Protection and Privacy Bill 2014 was therefore a milestone. Accordingly, the Collaboration on International ICT Policy for East and Southern Africa (CIPESA) submitted comments to that version of the bill. Various concerns were raised including vague wording which left the bill open to misinterpretation, unclear procedural processes for collection and retention, as well as the costs associated with accessing personal data.
More recently on , CIPESA welcomes the Parliament of Uganda’s call for submissions on the Draft Data Protection and Privacy Bill, 2015. It once again gives opportunity for stakeholders to provide input to ensure that the law, when enacted, measures up to internationally acceptable standards of data protection.
In our latest submission, we highlight some of the positive principles and provisions of the Bill. Furthermore, we indicate areas of concern and suggest amendments to ensure that if the bill is passed into law, there are sufficient safeguards to regulate the collection, storage and use of data towards upholding citizens’ right to privacy.
See the full submission made on the Uganda Data Protection and Privacy Bill, 2015 presented to the Committee on Information and Communication Technologies (ICT) in the Parliament of the Republic of Uganda

04Dec

Harnessing the Data Revolution for National Development: The Case of Uganda

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By Loyce Kyogabirwe|
The United Nations (UN) has recognised data as a key factor for achieving and monitoring sustainable development. Indeed, the push for open data that contributes to government transparency and accountability and promotes citizens’ right to information and innovation through the Information and Communication Technology (ICT) sector continues to gain prominence globally, including in Africa.
In Uganda, the government is geared towards contributing to the emerging data revolution for sustainable development. Since 2016, the country has been party to the African Charter of Statistics and is also working to implement the UN Fundamental Principles of National Official Statistics as well as the Cape Town Action Plan. Uganda has also developed the National Development Plan and is party to regional development agendas such as Agenda 2063 and the East African Community’s Vision 2050.
In tandem with the above commitments and recognition of the need for quality data that responds to the demands of development agendas, the Uganda Bureau of Statistics (UBOS) together with other development agencies hosted the country’s first High Level National Data Forum from November 14 to 17, 2017 in Kampala to reflect on how to harness the data revolution for national development.
While presenting the National Standards Indicator Framework (NSIF) at the Forum, Imelda Musana, Deputy Director of Statistical Production and Development at UBOS underscored the importance of data and statistics for actualising the NSIF as an effective tool for measuring progress and performance, informing planning and resource allocation in all government Ministries, Departments and Agencies (MDAs).
Further, Bill Anderson, Data and Information Architect at Development Initiatives (DI) reiterated the need to build sustainable and inclusive data ecosystems. “To meet national development plans and the Sustainable Development Goals (SDGs), we need to build sustainable systems that are sustainably funded to tell the story of everyone in every village” he said.
During the discussion, it was recognised that due to decentralised statistical systems and fragmented data sets, official statistics did not reflect data generated by non-state data producers including the private sector, academia, civil society and the citizens. Participants therefore called for frameworks that can allow these sources of data, who are also motivated by the data revolution, to feed into the national statistics.
Coordination, collaboration and partnerships was also pointed out as essential for a functional and inclusive data ecosystem. According to Norah Madaya, Director of Statistical Coordination Services at UBOS, partnerships are inevitable in order to minimise duplication of efforts and increase efficiency and harmonisation of programmes. However, she noted existing challenges that hinder coordination and partnerships within the data ecosystem, such as lack of institutionalised statistical structures in government agencies, inadequate commitment to factors driving coordination such as harmonised ICT platforms and resistance to joint survey undertakings.
Meanwhile, usability as a driver for the national data ecosystem was also discussed, with widespread calls for data released by government to be in easily accessible digital formats. Currently, most public information/data released by government agencies is in PDF format and does not meet open data principles as prescribed in the Open Data Charter which calls for data to be released in a format that easily accessible, reusable and allows for manipulation, among others.
On the ICT front, Kenneth Bagarukayo, from the Ministry of ICT and National Guidance noted that Uganda’s readiness for open data is hindered by lack of common data standards as well as inadequate infrastructure. As such, in 2015, the government embarked on the process of developing the Open Data Policy that will help address these challenges. A draft of the policy has been developed with priority areas focusing on open data working groups, the development of an open data portal and high value data sets. According to Bagarukayo, policy consultations have been completed and the draft policy will be presented to cabinet for approval in December 2017.
Meanwhile, efforts are also underway to build Communities of Practice (CoP) on data among civil society, private sector and public-sector organisations. One such initiative is the East Africa Community of Practice for Data Revolution and SGDs which is working to enable actors meet frequently and deliberate on best practices, challenges and experiences of their engagements on data and community at the subnational level. Development Initiatives is leading efforts in Uganda towards agreeing on a general action plan for the country’s CoP and recently held a meeting with various actors including CIPESA to discuss gaps and needs that the CoP might address to increase collaboration across the East African region.
Ultimately, the National Data Forum was a ground-breaking event which will hopefully bring the data revolution to the forefront of national debates and support awareness of the evolving data demands for measuring national, regional and international development initiatives. Discussions over the three day event rallied stakeholders to come together and support more investment in data production, analysis and use, for evidence based planning.

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