Uganda Said It Would Ban VPNs To Prevent Users From Dodging Its Absurd New Social Media Tax: Guess How That Worked Out?

from the OK,-we'll-just-tax-everything-instead dept

Three years ago we wrote about African countries that thought taxing blogs and social media was an easy way to raise money -- and to muzzle inconvenient voices. A year later, Techdirt was reporting on a sudden boom in VPN use among Ugandans keen to avoid that country's levy on social media use. As Karl Bode reported, back then the authorities were pressuring ISPs to ban the use of VPNs. A post on the Rest of the World site has a useful update on how things have worked out since then. First, the money:

after three years, the tax, which amounts to about 5 cents (200 Ugandan shillings) per day to access any of more than 60 social media platforms, has failed. It has neither helped the government raise significant revenue nor curtailed lively online discussions by young Ugandans.

In its first fiscal year, the Ugandan government was projected to collect about $77.8 million (248 billion Ugandan shillings) from social media tax. Instead, it raised only about $13.5 million (49.5 billion shillings). In the next fiscal year, Uganda lowered its expectations and projected to collect $16.5 million but only just slightly beat its target by raising $18.7 million.

The reason, as expected, is that people are turning to VPNs, often the free ones, despite the intrusive pop-up ads and questionable security. It turns out that it's harder to ban VPNs than the government thought. So the Ugandan authorities have come up with Plan B:

Thanks to VPNs users have found a way around the social media tax. That's why, on April 29, the government replaced the social media tax with a 12% excise duty on internet data that will likely hike the cost of internet access in the landlocked country that already has some of the highest internet costs in the region.

The idea here is presumably that even if people use VPNs, they will have to pay the data tax. That will probably work, but the move brings with it a huge problem. It will make using the Internet for any purpose in Uganda more expensive, which will not only discourage ordinary people from taking advantage of it, but will also throttle Ugandan online startups. However much the new tax brings in, it is likely to be far less than the deeper economic harm this short-sighted move will inflict.

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Filed Under: blogs, commentary, free speech, internet taxes, social media, uganda, vpns


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  1. identicon
    Anonymous Coward, 7 May 2021 @ 12:32pm

    but will also throttle Ugandan online startups.

    Not just online start-ups, but any form of technical/engineering start up. Count the number of entrepreneurs online, who used the Internet to learn what they needed to build a business, and for all the mentoring that is available when you are online. Even farmers can do better if they can get online for crop and market information.

    reply to this | link to this | view in thread ]

  2. identicon
    Anonymous Coward, 7 May 2021 @ 12:33pm

    a 12% excise duty on internet data

    So, um... they take a random 12 bytes out of every 100 bytes sent over the internet?

    reply to this | link to this | view in thread ]

  3. icon
    TaboToka (profile), 7 May 2021 @ 12:34pm

    Re:

    To the compressors!

    reply to this | link to this | view in thread ]

  4. icon
    That Anonymous Coward (profile), 7 May 2021 @ 12:48pm

    The infamous NYT's article that was 1 word that took 6MB and 150 requests to load comes to mind.

    I gotta think that Ugandans would hunt down and harm any site operator that was doing autoplay videos or preloaded it.

    reply to this | link to this | view in thread ]

  5. identicon
    Dax the great and terrible, 7 May 2021 @ 1:28pm

    So in light, the government basically said that regardless of how the internet is being used..

    Uganda end up paying for it...

    I'll let myself out...

    reply to this | link to this | view in thread ]

  6. identicon
    Whoever, 7 May 2021 @ 1:41pm

    Re:

    So, um... they take a random 12 bytes out of every 100 bytes sent over the internet?

    No, it's 12% overhead. Because of the way the packets are packed, no actual data is lost.

    reply to this | link to this | view in thread ]

  7. identicon
    Bobvious, 7 May 2021 @ 2:41pm

    Re: what's good for your goose

    is good for Uganda.

    reply to this | link to this | view in thread ]

  8. identicon
    MightyMetricBatman, 7 May 2021 @ 5:06pm

    Re:

    The Jerusalem Post is pretty awful as well, and has been even worse in the past. The home page took about ~450 requests and ~4.5 MB. It is the sheer number of requests that takes the cake on that paper's site.

    I don't know what it is about newspapers, but they are near universally awful by number of requests and data transfer.

    reply to this | link to this | view in thread ]

  9. identicon
    Anonymous Coward, 7 May 2021 @ 5:46pm

    It's pointless to comment on this internet tax without first understanding:

    • How the gov't sources revenue overall: Is there an income tax? VAT or sales tax? Corporate tax?

    • What's the internet access situation: Is there a monopoly or oligopoly, resulting in high costs? Or, are there many competing service providers, so costs are low?

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, 7 May 2021 @ 7:47pm

    Re:

    they take a random 12 bytes out of every 100 bytes sent over the internet?

    Sounds like robbed-bit signaling.

    But more seriously, what happens if an ISP is not charging for "data"?

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, 8 May 2021 @ 12:50am

    Re:

    You would have had a point if it was not obvious that the tax is squarely aimed at stopping people getting organised on a large scale. That objective was given away by the first version of the tax..

    reply to this | link to this | view in thread ]

  12. icon
    PaulT (profile), 8 May 2021 @ 1:42am

    Re:

    Why would either of those have any bearing on the issue at hand, which is that the tax is being explicitly introduced to make up for the failure of the previous specific tax to punish one industry?

    reply to this | link to this | view in thread ]

  13. identicon
    Annonymouse, 8 May 2021 @ 3:11pm

    I assume that the local ISPs will report users usage but I wonder how they will handle Starlink and such.

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 8 May 2021 @ 9:09pm

    I was wondering if Richard Bennett had some Ugandan ancestry.

    reply to this | link to this | view in thread ]

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    julian liam (profile), 9 May 2021 @ 8:31am

    Cash for Cars

    There are a number of people who have old cars, SUVs, trucks all piled up in their garage, with no correct way to dispose of them. With Cash for Cars Sunshine Coast; you are bound to find a scheme that could very well be the perfect way out of this issue.

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