If you’re an avid user of the internet, you have most probably encountered talk and chat around a group of influencers that helped socialite Sheila Gashumba and her partner Marcus Lwanga (God’s Plan) to popularise their initiative of eradicating “Social Media Bullying in Uganda.”
Just a few days ago, alumnae of King’s College Budo took to the internet to unpack tales of mistreatment, harassment and bullying that they faced at the hands of their male counterparts – some situations, they said have since had a life long effect on them. They didn’t demand a lot, just for their administration to acknowledge their mistake and do better.
Almost immediately after this topic, Ms Gashumba told similar tales of how Urban Television and Scoop on Scoop presenter Tina Fierce have for long humiliated her, her family and friends, but the nation has been looking on. It is this background that led to a hashtag calling for action to eradicate the vice that the social media influencers took part in.
The said influencers (about 4) were each paid Shs 1M for their services and they didn’t hesitate to tell whoever cared to listen.
July 2020 will mark exactly two years since the government of Uganda introduced tax on Over The Top (OTT) Services, a tax that has since been known as the Social Media Tax.
According to government, the OTT is meant to raise revenue needed to facilitate Uganda’s much anticipated leap into middle income status. The target was to achieve it by 2020. President Museveni further said the OTT would go far in helping to eliminate gossip and citizens that had been “abusing” the social media space.
As such, observers that I engaged on this topic emphasize that OTT was brought not because influencers were earning but because the government failed to figure out ways on how to tax the likes of Facebook, Twitter and Google over what they earn when Ugandans use their platforms. Infact, they insist that the tax would never have come up if the government found means of taxing the said platforms directly.
Some other sources say that the Tax was suggested and promoted by Telecom Companies operating in Uganda who felt that their subscribers were nolonger making calls as they could do that easily over Whatsapp or Skype.
Before the OTT was introduced, low income earners could spend some Shs 250 daily to access the internet using the option of social bundle services. When the tax was introduced, it hiked the cost of internet by an overwhelming 80% (Shs 200 more on a daily basis) and maximumly reduced their already non-existent incomes.
Eng. Dr. Francis Tusubira, an Engineering and Technology expert was recently hosted at an ICT Webinar by the Centre for Advanced Strategic Leadership (CASTLE) and among his many points that day was the issue of priority in government. He argues, and rightly so, that the world has transformed and learners need to be introduced to the internet as early as possible because that is their world now.
“There is this continuing fight (in our country) against technology as if it is an enemy. The biggest challenge is awareness [to the leaders and policy makers] that technology is beneficial” Eng. Tusu, as he is fondly referred to, said at the Webinar.
He lightly recalled an experience with a former Vice Chancellor of Makerere University where he told Prof. John Ssebuwufu (VC then) that people claim that a computer at USD 700 is expensive but there is no hesitation about buying a USD 100,000 vehicle for the VC or Minister or the Permanent Secretary. He argued that the issue is not shortage of resources.
“You say that the budget is just 1% but picture this, if the Ministry decided that our priorities are ICT, we are not going to buy any vehicles this year. Would they have any challenges in connectivity?” Eng. Tusu pondered.
“If the policy makers had the awareness, would we have contradictions where one Ministry (ICT) is doing everything to reduce internet prices and another Ministry (Finance) is doing everything to make money out of it?”
Eng. Tusu likened the OTT tax that government levies on internet users as taxing the grass which the cows feed on instead of waiting to tax the milk that comes from the cow.
Allan Ssenyonga, a writer and an ardent user of the Social Media space, has no nice words for the OTT tax. According to him, OTT is just a bogus tax because it is levied on the basis of access and has no regard of whether one is making money online or not.
He cries that citizens that are not able to afford to pay OTT are denied access to information in an era that has been dubbed the Information Age. Access to information is a fundamental human right recognized by the Universal Declaration of Human Right (UDHR) in Art. 19 and Mr. Ssenyonga is very disturbed that instead of our country pushing for access to information as a right, we are taxing it.
Between taxing influencers’ income and levying the OTT tax, his answer is what you are guessing.
“Taxing social media influencers’ income is better and it can be done from the side of those giving them work (I think it is withholding tax or something like what you pay when you engage consultants). I choose this because it is off income earned and it shows the government that influencers are not idlers but serious players in the information market who can also contribute to national growth.” Ssenyonga told The Ugandan Wire.
Jordan Tumwesigye, a lawyer, thinks otherwise. Between the two instances, he prefers levying the OTT. His reason is that people are now used to that form of tax and taxing influencers’ income is not only selective but will serve to cripple that area of business, which for some serves as the sole source of income.
Pearl Elisabeth Kitimbo, a Social Worker and part-time influencer says she’d rather keep paying the OTT than have her income taxed. According to her, it is cheaper for an influencer to pay OTT than pay taxes off income because “the money is not all that much.”
“The instance is like our old fashioned salaries. You’re paid Shs. 1M but after taxing and NSSF you end up with Shs. 700,000. Now imagine how much an influencer would be getting after taxing, yet for some people it is a side hustle. I’d rather pay that OTT.” Kitimbo said.
For Louis Kizito Namwanja, a Lawyer and Tax Observer, the scenario presented more questions than answers. His worry was the mechanism of implementing the option of taxing Social Media influencers.
“How realistic is taxing Social Media influencer’s income? How practical will it be? Will they be registered somewhere? Will they file returns? How will the Uganda Revenue Authority (URA) know about their income. What kind of tax will it be? Will it be a witholding tax? And withheld by who? Who will be the witholding agent of that income? You see tax is an information game. If information doesn’t flow from the tax payer to the tax man, then the taxation mechanics fails.” Namwanja observed.
Namwanja’s worries, if you’ve been following closely, were tackled partly by Ssenyonga in his observation and if government can tax the institutions/persons paying influencers to withold part of the payments as tax, it would tax their income.
From the weigh-ins above, what would you rather have taxed? OTT or Social Media Influencers’ earnings?
