It’s not a surprise that Uganda’s Communications Commission has announced that the country’s number of social media users dropped, three months after the introduction of social media tax which, according to the president, was meant to combat online gossip.
The data released by the commission is for the third quarter of 2018, between July and September. The numbers show that there was a steady decline in the revenues collected from social media tax as well as a dip in the value of mobile money transactions.
Social Media Usage
As per the data coming from the Uganda Communications Commission (UCC), the number of people paying social media tax, otherwise known as OTT (Over The Top) services, declined steadily from July where the number stood at 8 Million taxpayers to 6.8 Million in September 2018.
Consequently, the revenue collected from the OTT tax that was introduced in July dropped from UGX 5.6 Billion (approx. $1.52M) in the first month to UGX 3.9Billion (approx. $1.06M) in September of the same year.
The commission reports that Uganda has 13.5 Million internet subscribers and only 50% of these users accessed OTT services. It could be that Ugandans have toned down on social media usage but the likely cause could be the usage of VPN services to mask their social media usage and thus evading the OTT tax.
It’s not only social media that got a hit, but mobile money also suffered thanks to the tax increment implemented the same time as the social media tax. UCC notes that mobile money users increased by 5% in Q3 2018 to stand at 23.9 Million users.
This, however, came with the decline in the value of transactions despite a growth of 50% in the number of transactions. Interestingly, the balance on customer’s accounts grew by 141% from the last quarter, an occurrence that the commission says was caused by the introduction of mobile money tax which led to more people holding on to their money in their mobile money wallets.