This archive report was first published on 28 November 2019.
On November 28, 2019, a study was released by Mozilla and the African Union Commission (AUC) after examining the misconceptions, challenges, and real-life impact of additional taxes on over-the-top services (OTTs) imposed by governments across Africa.
The study, which analyzed several countries including Uganda, found that taxation regimes imposed without public consultation and impact assessment have increased barriers and pushed people offline, limiting access to information and services.
Uganda introduced a one percent tax on the transaction value of payments, transfers, and withdrawals, increasing mobile money fees from 10 percent to 15 percent. It also introduced a new levy on more than 60 online platforms, including Facebook, WhatsApp, and Twitter, amounting to 200 Ugandan shillings (USD 0.05) per day.
According to the study, the impact of these new taxes was immediate, with the number of internet users in Uganda dropping by nearly 30 percent between March and September 2018.
“These regressive regulatory measures are taking place as governments rush to introduce digital transformation initiatives, and instead of focusing on how to connect more people to the internet, the region is building barriers that keep them off it,” said Alice Munyua, the Policy Advisor for Mozilla in Africa.
The study further revealed that this had an impact on the economy, with the country forgoing 2.8 percent in economic growth and Ugandan shillings 400 billion in taxes.
