The New Social Media Tax and VPN’s: All You Need to Know About it

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After the Parliamentary Seat a few weeks ago that was specifically aimed at discussing about the new Taxes Introduced by the Central Government in the 2018/19 economic – year Budget, many new taxes were passed. Among these included the Social Media Tax that enforces every Ugandan to first pay an amount of ugx 200 in case he wants to access his/ her social media platforms.

This New OTT (Over The Top) tax is effective 1st July 2018 (tonight). Here is all what you need to know about this new OTT Service;

What are OTT services and Content?

OTT services refers to ‘the transmission or receipt of voice or messages over the internet protocol network and includes access to virtual private networks’

On the other hand, Over-the-top content (OTT) is the audio, video, and other media content delivered over the Internet without the involvement of a multiple-system operator (MSO) in the control or distribution of the content. Consumers can access OTT content through Internet-connected devices, smart TVs, set-top boxes, gaming consoles and desktop and laptop computers and tablets.

Which Social Media Platforms are to be Taxed?

Among the Social Media Platforms to be blocked include Facebook, Snapchat, Whatsapp, Twitter among others. Here is the Full List;

List of Social Media Platforms to be Blocked

Are mail and Video Streaming applications to be included?

No, mail services such as G-mail, Webmails among others are currently not considered as taxable OTT services. This is also the same case to video streaming, such as Ugandan television and iflix. They are currently not to be considered as taxable OTT services

Will VPN’s work?

VPN’s are a common global method of accessing internet services while masking the nature of the internet service being used. It is because such VPN’s can then be used to access OTT services indirectly that government has included such sites as being subject to OTT TAX.

Unfortunately, the creation of a VPN service is relatively easy, and takes place outside of Ugandan borders. For this reason, the operators will block access to VPN’s that the authorities declare to be used for OTT services, unless the consumer has paid their OTT TAX

Why Should One pay the OTT TAX?

To be able to use the OTT services such as WhatApp, you are required to pay an OTT TAX of UGX 200 per day. If you don’t pay the tax, you will not be able to use the listed OTT services even though you may have a valid data bundle.

Criticism to the New OTT Tax

Critics of the new tax say it will potentially hike the cost of data in a country where per capita income stands at about $600 as according to Africa News. Data costs in Africa are already among the world’s highest, according to digital advocacy group World Wide Web Foundation.

Of Uganda’s 41 million people, 23.6 million are mobile phone subscribers and 17 million use the internet, according to state-run Uganda Communications Commission. Opponents of the new tax also say it could also act as a curb on free speech in the country, but government officials say the levy is needed to generate revenues to fund expansion of public services.

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