Social Media Taxes: A Financial Barrier for Independent Voices

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With press freedom and freedom of speech increasingly under attack, social media is often the last space in many countries for independent voices. This has been especially true in countries where governments are openly hostile to news organizations.

More recently, however, many governments have begun taking measures to stifle access to these global social media platforms. While there are multiple ways governments are doing that, one approach used by the Ugandan government is by enforcing a social media tax. This social media tax levies 200 Ugandan Shillings ($0.05) per day for users to access so-called Over-The-Top services—media distribution platforms that deliver content over the internet. These Over-The-Top platforms are selected by the government, and include social media platforms like WhatsApp, Facebook, and Twitter. To enforce this tax, the governments rely on the major telecom companies, which “set up special mobile money menus for users to pay the tax or be denied access to a list of 58 websites, apps, and voice calling platforms.”

Despite government claims that the social media taxes are largely to increase revenues, there are persistent suspicions that these taxes are an attempt to silence dissent. In many countries, social media often serve as an avenue of news for local newsreaders (who can visit pages of news houses). The economic implications of this tax could have a direct impact on the social media accessibility for low-income people for whom these policies add an undue financial pressure. The social media tax has essentially “pushed the affordability line [of internet] further” particularly impacting women, people with disabilities, people who couldn’t afford, or those that were just coming onto the internet, says Juliet Nanfuka from The Collaboration on International ICT Policy for East and Southern Africa (CIPESA). Mobile money transactions, the only payment method of the social media tax, are also facing a one percent levy by the government, further affecting Ugandans’ affordability and access to social media.

This drastic change in accessibility is going to have a great effect on the way that citizens of this country will engage with news media. An analysis of the tax by Research ICT Solutions showed that it hit rural regions the hardest, where average incomes are even lower. These low-income people who are unable to afford the additional costs, suffer the most under this tax. They are pushed away from social media with no opportunities to contribute their voices, while the higher-income people, who are able to afford, become the majority voice instead. This further contributes to the growing digital divide in Uganda.

Furthermore, this social media tax is likely to have a negative impact on the country’s economy as well. According to a report published by Research ICT Solutions, since the social media tax has been implemented, Uganda has seen a 20 percent drop in subscribers using data, which could also undermine the broader economy. Multiple studies, including one from the World Bank, estimate that “a 10 percent increase in mobile broadband penetration translates to a 0.8 to 1.5 percent increase in a country’s GDP growth.” This decline in data use would reduce mobile operator’s income, potentially endangering thousands of jobs in the digital sector. Factoring both of these economic impacts could alone cost $750 million to the Ugandan economy.

There is also a risk that if these policies continue to remain in effect, there could be a spillover to other countries in the region. Indeed, a few African governments have already followed Uganda’s footsteps and have attempted to use other forms of economic policies to curtail independent news circulation. Tanzania passed a law recently to charge bloggers a $930 annual fee to publish online, and Egypt passed a bill that allows the government to block any social media accounts with more than 5,000 followers. Others like Benin have tried in the past to put levies on social media, while countries like Zambia and Kenya have instituted levies on social media/internet use.

Ultimately, should taxes on social media users persist or even expand, it becomes even more important for researchers and media reform advocates to continue highlighting how these seemingly economic policies actually have a direct, immediate, and negative impact on the news media ecosystem. Otherwise, governments will have found another effective tactic to hinder press freedom, censor dissent, and limit civic engagement online.

Roshni Shah is a first-year graduate student at the Elliot School of International Affairs at George Washington University. She is currently an intern at CIMA. 

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