Who Will Still Be Logged in When Data Tax Kicks In?

Who Will Still Be Logged in When Data Tax Kicks In?

By Angella Nampewo |

Summary

It is my hope that if this amendment passes, it will not result in many unintended consequences in unforeseen areas because if there is an extra Shs120 on top of the cost of every 100MBs, some people might really think hard about whether or not they need to be online and for how long, meaning that whichever business was hoping that these guys would be hanging around online waiting to buy and sell or even consume information might be left a few shillings short.

 For a few days leading to and after the presidential election this January, the online citizens had their activities suspended by the State in an internet shutdown. Initially, the smart ones thought they could circumvent the long arm of government by using virtual private networks (VPN) but the State responded with fire, bringing everything to a halt and effectively demonstrating who was boss in the situation.

There were casualties, of course, including government agencies and key services were caught up in all of this. So the blockade had to come down, but it left the netizens with a bitter taste in the mouth, and an addiction to VPN.
If over-the-top (OTT) tax was enjoying a revival at that time, the shutdown slammed the brakes on it and led to a regression where even regular contributors of OTT not only begun to consider VPN, they actively sought it out and jumped on board. There was no saving the tax after that.
This and past disagreements have led to meagre collections of OTT and a proposal has been made to scrap it. We get to say ‘we told you so’ to government, but it gets to have the last laugh with the proposed new levy of 12 per cent on data bundles.

But government may want to pause and reflect on the objectives of this tax. True, the primary objective is usually to raise revenue, but if we look at the money in isolation from the other factors that determine if we actually get it, we may end up with a resounding defeat and rejection as has happened with the OTT.

To start with, data is the new sugar in the eyes of many consumers. It is a necessity. Owing to Covid-19 disruption, many operations have been compelled to take their operations online and have their personnel develop capacity to function remotely.
But here we are, just as the runners assemble at the starting line, getting ready to be flagged off, along comes government with new hurdles, effectively digging potholes that complicate the race perhaps to see how much sweat they can draw from all the participants or just for the thrill of seeing who makes it to the finish line, broken bones and all. Yes, we need to raise revenue, but at what cost?

In any case, the government may want to make certain guarantees of connectivity before making it a whole lot more expensive. Our need for revenue is real, but so is the need to recruit as many subscribers to online platforms to enable many economic plans to take place.
One of the reliefs in the proposed tax amendments is the proposal that education and medical services will be exempt from the 12 per cent levy on data. Where the taxman will start and end in defining education and medical services remains to be seen.

However, as we found out during the internet shutdown, there is more interconnectivity across sectors and there is nothing like the internet to tie us all together.
It is my hope that if this amendment passes, it will not result in many unintended consequences in unforeseen areas because if there is an extra Shs120 on top of the cost of every 100MBs, some people might really think hard about whether or not they need to be online and for how long, meaning that whichever business was hoping that these guys would be hanging around online waiting to buy and sell or even consume information might be left a few shillings short.

This article was first published by the Daily Monitor Uganda on April 04, 2021

 

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