Social media tax has got implemented in Uganda, the government is collecting revenue, but users and service providers are crying foul. The resulting chaos in Uganda could be a teachable moment for Zambia.
Here is how the social media tax is collected
Tax on social media use was introduced in Uganda to help the government collect revenue to supplement financial efforts, but there are repercussions. Service providers are made to censor vital social media services and sites such as Facebook, Instagram, Twitter, and WhatsApp, to name a few. A mobile network subscriber has to pay K22 per month to access these services or K0.72 per day. If a subscriber doesn’t pay the tax, then they will be restricted to the services. The social media tax payments go through mobile money services, and this is where the downside comes in.
The mobile money service booth agents do run out of float balance on their machines. The minimum amount for deposit in Zambia is K5, and it would be tedious for an agent to log K5 transactions, and the stationery would run out fast. The mobile money booths close, and this can be inconvenient for people who have free time to make deposits after work.
Who suffers in the long run?
Mobile network service providers make money off internet use, and this can be affected because most subscribers use the internet for social media.
Corporations that advertise their products and services on social media to customers that never have time for local TV or radio would lose out.
Entrepreneurs who use social media to engage with their customers can lose out on business.
Social media personalities would have a reduced fan base and would find it difficult to influence their followers.
The government would begin to lose out on tax from SMEs and mobile network service providers as they would find it challenging to engage with customers or have them spend.
It is still possible to access services without paying tax
There are tons of other social networks that people can turn to in the current tech climate. If not using alternatives, people can always resort to VPN services. People can still stay in touch with family and friends or use the taxed social media altogether without paying unless the government places a tax on general internet use or employ a watchdog to police everyone active on social media for receipts. ZICTA alone can’t manage to police everyone as it would be a mammoth task for Zambia had over 1,400,000 people on Facebook alone in 2016, according to a report given to Internet World Stats by Facebook.
Social media tax if introduced in Zambia, can open the door to another form of taxes, but it might not be worth it looking at the repercussions. Tell us what you think about the introduction of social media tax in Zambia. If you have any questions or comments, please use the comment section below.