OPED | Excise Duty on Internet: Reactionary policy interventions not good for a developing country

Alexander Kyokwijuka, Humble Citizen, Kigarama – Ndorwa East

Our education system has always had problems and we have continuously advocated for a complete overhaul of the said system. While the folks in charge were still figuring out how to overhaul the system, boom COVID19 happened. 

As we talk, Ugandans who had invested in education, running educational institutions are the most hit by this COVID 19 pandemic. The last time I was in Mbarara, I was shown a number of well-structured schools in town whose owners were looking for buyers so they exit the business. 

After the first wave of COVID19, with guidance from the Government of Uganda, it was clear that we were finally accepting the reality that the future is digital. Those who were running small grocery shops realised that the future of trade is online (digital). Those of us in Consultancy and training finally realised that the future of our business is online. 

As we push into the digital era, the banking sector is also trying to digitise everything so the push towards a cashless economy would be seen near. (Please note that as recently reported, paper money is currently one of the most effective ways by which COVID19 is spreading).

I know a few banks that are almost 90% online. Even when we are still struggling with cyber integrity. 
Now, with these realities, you would still appreciate that the cost of the internet in Uganda is still way high because there is no effective regulation of the private telecommunication service providers. The situation had been worsened by the introduction of OTT. This was no longer a big problem because we found ways of putting up with it. 

With the second wave of COVID19, and the lockdown that has followed. You would expect that all businesses, including schools, and other categories are definitely thinking of either shifting a bigger Chuck of their operations online, if not going 100% digital. 

The digital infrastructure in Uganda was steadily growing and thank God for a reasonable portion of the population is able to read and access news and other basic services online. Thanks to MDAs that are embracing e-governance enabling the citizens to access services online. 

URA is one of those that have done a commendable job in digitising their services to the citizens, and the humble Citizen can go about their business in Kigarama and interact with the tax authority comfortably in the comfort of the hills in Kigezi, without having to travel miles and miles to have someone issues attended to. 

Ironically, now the Government of Uganda has imposed a 12% tax on data, internet and the good Uganda Revenue Authority is supposed to administer this same tax. And my question is, does anyone in Government feel that we are killing our own efforts!?
This has reminded me of a long time ago when I was still young. My late mother used to rear pigs in Kigarama, and one reckless sow that didn’t care so much used to deliver and if it did in the middle of the night and there was no one, this careless sow would eat her own offsprings (piglets). This always left my mother and us not happy with this mother pig because we were always looking forward to an expanded stock on the farm if these piglets were let to grow into big pigs, and this would have meant bigger money value on the humble farm. 

I see the same with the folks in charge of this country. At the time when the whole world is migrating to digital reality, we are busy imposing more taxes on the same enabler (internet). I don’t know whether we are being too smart, or we are actually not aware of the possible circumstances when all businesses, schools, hospitals, grocery shops are are actually either already going digital, or are thinking of going digital. 
In the end, we shall have no one else to blame but ourselves because we are starting to joke too much. 
My heart goes out to the young innovators here who probably are thinking of developing another web application to help solve a problem here and there but could now be rethinking whether that is the best idea now given the added cost worsening the cost of the internet. Like we were always not happy with our mother pig eating her own piglets, am sure the citizens are not happy seeing the leadership doing things that may otherwise cripple the economy.

But hey, as a humble Citizen, I can only point out these things, and I can only hope that the folks in charge can listen and reconsider as we told them that OTT would not work but because they really wanted to try out their chances, they have only realised barely two years later.  We hope, that we as a country will realise this reality and get back on the right track before it is too late. 
As I conclude, I wish to encourage everyone to put on a mask, stay home, sanitise and keep a distance because COVID19 is still actively recruiting people into the other world. And I don’t want to talk about the manoeuvres now surrounding the just approved COVIDEX (an additional and supplementary treatment to viral infections including COVID19). 

Greetings from Kigarama. 

AUTHOR: Alexander Kyokwijuka, Humble Citizen, Kigarama – Ndorwa East

Subscribe for notification