Uganda’s Telecomms Operator Will Block Virtual Private Networks (VPN) To Stop Social Media Tax Evasion

Ugandans are turning to use Virtual Private Networks (VPNs) to bypass a new social media tax that came into force on Sunday. This has attracted the attention of Uganda Communications Commission (UCC) (telecommunications watchdog) which said that telecommunication companies will block VPN applications that are aiding Ugandans to evade social media tax. UCC said;

We have technology that will block the VPN services so that no one dodges the taxes…..We have all the systems needed to block the virtual private networks already here and the government will move anytime to effect it

According to the new Excise Duty (Amendment) Bill,  people using any of the popular social platforms and Over-the-Top (OTT) services, including WhatsApp, Facebook, Twitter, Skype etc. will pay a daily tax of 5cents. The government has also issued a directive, saying that mobile payments can only be made using approved platforms.

The move to tax social media usage said to be an attempt to curb ‘gossip’ and raise revenues, has been hugely unpopular with the country’s youth, who use online services to not only stay in touch with their friends and family but also for mobile payments. The government, however, has argued that the tax will be used for educational, research or reference purposes. The additional revenues will also apparently help the country in paying off its growing national debt.

With the tax coming into effect, tech-savvy Ugandans have taken to VPNs to avoid paying what they view as unjust taxes by the government led by long-time President Yoweri Museveni. With a view towards stopping that practice, the Museveni administration has now reportedly moved to block VPNs entirely, although, how feasible that will be technically, remains to be seen.

This is the first instance of a government tax on the use of what are generally free services in other regions and it remains to be seen how effective it is in the long run. If successful, Uganda could actually shine the light for a new tax revenue stream for governments.