Survey shows sharp drop in Social Media and Mobile Money usage

As parliament prepares to debate 0.5 percent tax on mobile money withdraws and Shs200 daily tax on social media, results of the latest survey that was carried out to evaluate the impact of the recent taxes were released. However, they indicate a sharp drop in the number of users – as well as the frequency of usage – for both services.

The survey which took place from July 13- 16, 2018, shows that at least 85 percent of the respondents hadn’t used social media since the tax came into effect.

“96 percent of respondents had used social media in the past 6 months,” the report pointed out. However, noting that “this number [had] dropped to 85% when asked if they had accessed social media since July 1st,” the report says. The taxes were effected by government on July 1st

Similarly, Mobile Money usage suffered a decline according to the survey, with 93 percent of
respondents reporting that they had used Mobile Money in the last 6 months. 44 percent were transacting less money in July and 47 percent reported that they had completely stopped transacting Mobile Money after the implementation of the new tax.

The survey was carried out by PR Company, Whitehead Communications, and collected information from 3015 respondents. “Results were collected both online and through face-to-face interviews across the country, gathering 3,015 responses.

Most of the participants in the survey were located in the central region. 72 percent were resided in Central Uganda, 15 percent in Western Uganda, 8 percent in Northern Uganda and 5 percent in Eastern Uganda, with 93 districts represented overall.

The majority of the respondents were youths between 18 to 35 years of age and at least at a bachelors degree level of education. 74 percent of respondents were male and 26 percent were female.

According to the findings, a sizeable number is accessing social media using VPN application. While an equally impressive number is paying the tax to access the same services.

“Of those who reported as using social media since the new tax was introduced, 40 percent said they paid the OTT tax; 57 percent were using VPN; 38 percent were using WiFi or Hotspot.

Other noteworthy findings of the survey are the impact the taxes have so far had on the businesses and lives of the respondents.

For instance, the mobile money tax has led to the delay in payments, general inconvenience, increased cost of doing business, increased risk, loss of income, reverting to banking and cash payments” as some noted in their responses.

While those using social media for business or as individuals pointed out that it had led to delays in conducting business, disrupted payments, general inconvenience, increase in the cost of doing business, loss of income, reduced access and a smaller online audience.

The essence of the survey, according to Whitehead Communications, was to serve as a resource in a consultative and evidence-based review of social media and mobile money taxes.

Cabinet has reviewed the two taxes slapping 0.5 percent tax from the earlier 1 percent on mobile money withdraws while maintaining Shs200 daily as social media tax. Parliament is yet to approve Cabinet’s decision.